02:29 PM EST, 11/06/2024 (MT Newswires) -- The Federal Open Market Committee is widely expected to lower its federal funds rate target range by 25 basis points to 4.5% to 4.75% at this week's meeting after a 50-basis point reduction to a range of 4.75% to 5% at the previous meeting, which represents a more cautious approach given a string of still-solid data prior to the weather-impacted October employment data.

The CME FedWatch Tool currently shows a 99.1% chance being priced in for a 25-basis point reduction at this week's meeting and a 0.9% chance of no change in the target range.

The FOMC's statement following Thursday's meeting is due for release at 2:00 pm ET, with Powell's press conference scheduled to begin at 2:30 pm ET.

While there is no update to the Summary of Economic Projections at this week's meeting, alterations to the statement and to Powell's comments at the press conference could give some indication of how the FOMC is viewing the progression of rates over the next few meetings, particularly the next one on Dec. 17-18.

Currently, there is a 70% chance being priced in for a further 25-basis point rate reduction at the December meeting.

Recent comments from Fed officials before the quiet period began on Oct. 26 showed expectations of further rate reductions, but those were tempered by strong employment data and still elevated, though slowing, inflation.

Some officials, including Fed Governor Michelle Bowman, who dissented at the September meeting in favor of a smaller 25 basis point reduction, have cautioned against cutting rates too quickly.

Since the quiet period started, data have shown Q3 consumption was roughly in line with expectations, PCE price gains accelerated, nonfarm payrolls rose only slightly in October due to the effects of hurricanes and strikes and wage growth picked up modestly, all indications that a further, though smaller, rate increase is appropriate.

In addition, the FOMC will need to consider how the economy and inflation are likely to progress under a second Trump presidency, though Powell and other officials have been clear that the FOMC takes fiscal policy as one input among many when determining monetary policy.

Even so, it is a near certainty that Powell will be asked about the results of the presidential and congressional elections and their impact on policy decisions, including the one this week, as well as whether he expects to be reappointed under Trump's leadership.