The U.S. Federal Reserve began its long-awaited interest rate easing cycle on Wednesday, September 18 with its first 50
basis points cut since 2008. Figure 1 shows the post-war history of Fed easing cycles. It demonstrates that starting with a
50-basis point cut is roughly the average cut from the Fed initially. The table below also highlights that interest rate cuts are
like potato chips, you almost never have just one. Indeed, the new Fed “dot plot” is for an ending Fed Funds rate of 3.4%
at the close of 2025.
