BlackRock Sees 50-Basis-Point Fed Rate Cut in September 2025

BlackRock’s Rick Rieder has forecasted that the Federal Reserve may implement a significant rate cut of up to 50 basis points in September 2025, responding to weakening labor market data and growing economic uncertainty [1]. This projection comes amid a backdrop of soft hiring numbers since April and a broader slowdown in key economic indicators. Rieder, BlackRock’s Chief Investment Officer, emphasized that the central bank is likely to ease monetary policy by the end of 2025, with two to three rate cuts expected in response to inflationary pressures and consumer spending trends [2]. His comments align with BlackRock’s institutional market outlook, which anticipates a resumption of rate cuts in the fourth quarter, reinforcing a broader market consensus that the Fed is moving toward a more accommodative stance [4].

The upcoming U.S. jobs report will be a key factor in determining whether the Fed acts more aggressively than previously signaled. While Fed Chair Jerome Powell has maintained that the labor market remains “in balance,” recent market expectations have shifted toward the possibility of a 50-basis-point cut, especially if employment data comes in weaker than anticipated [2]. However, the bond market has tempered these expectations, with the probability of a 25-basis-point cut in September falling below 40%. This shift is reflected in rising Treasury yields, particularly in the two-year note, indicating investors are pricing in a more cautious Fed response [2].

Political pressures have further complicated the Fed’s policy outlook. Donald Trump has repeatedly called for more aggressive rate cuts, criticizing Powell for maintaining rates at current levels. In response, Powell has reaffirmed the Fed’s commitment to a data-driven approach, stating that any cuts will depend on clear signs that inflation is under control [6]. This stance has helped preserve the Fed’s independence amid ongoing debates over its policy direction and broader economic implications.

The potential for rate cuts has sparked speculation about their impact on both traditional and crypto markets. Major cryptocurrencies like Bitcoin and Ethereum could see increased demand in a low-interest-rate environment, as investors shift toward risk assets [1]. Historical trends suggest that previous Fed rate cuts have led to surges in crypto valuations, particularly benefiting DeFi tokens and layer-1 networks. The total value locked (TVL) in decentralized finance platforms may also see a boost, as liquidity increases and speculative activity rises [4].

Global markets are closely watching the U.S. central bank’s next steps, with implications for emerging markets and global bond yields. A September rate cut would signal a significant shift in the Fed’s policy trajectory, potentially influencing monetary decisions across other central banks. Money markets currently price in two rate cuts by the end of 2025, with the first expected in September [7]. Investors and analysts will continue to monitor economic data and policy statements for further clarity on the Fed’s next move.

Source:

[1] https://dailyhodl.com/2025/08/02/fed-could-slash-rates-by-50-basis-points-in-september-after-weak-jobs-report-says-blackrock-executive-report/

[2] https://www.advisorperspectives.com/articles/2025/08/01/bond-traders-await-jobs-report-clues-feds-rate-cut

[3] https://www.swissinfo.ch/eng/tariffs-weigh-on-global-stocks%3B-amazon-slumps%3A-markets-wrap/89768223

[4] https://www.blackrock.com/ca/institutional/en/insights/global-credit-weekly

[5] https://www.facebook.com/manuel.guevarra.369210/posts/the-federal-reserve-kept-interest-rates-unchanged-at-42545-signaling-cautious-mo/734743306105547/

[6] https://www.ainvest.com/news/trump-comments-fed-resignation-rate-policy-tensions-2508/

[7] https://energynews.oedigital.com/mining/2025/08/01/gold-gains-nearly-2-after-us-payrolls-data-boosts-hopes-of-rate-cuts