Fed meeting notes: About half of respondents expect another drop in October meeting

The Fed meeting notes that expectations for policy rates have declined in the near term due to weaker than expected employment data and a significant increase in downside risks to employment. Almost all respondents to the market expectations survey expect a 25 basis point cut in the target range at the meeting, with about half expecting another cut in October. The vast majority of respondents expect at least two 25 basis point cuts by the end of the year, with about half expecting three cuts throughout the year. Respondents' expectations for 2027 and beyond remained unchanged, meaning their revisions to their near-term expectations reflect a judgment that the federal funds rate will return to its long-term level sooner than previously expected. Market-based expectations for policy rates are broadly in line with the survey results, showing about three 25 basis point rate cuts by the end of the year.