Markets are priced for another rate cut when the United States (US) Federal Reserve meets today. Investors expect that the Chair of the Federal Reserve, Jerome Powell, will lower the interest rate by 25 basis points to 4.00% from 4.25%.

The move, expected to be framed as insurance against rising employment risks, would mark a cumulative 150-basis-point reduction since the Fed began easing in September 2024.

Although a US government shutdown has delayed official economic data releases, private-sector indicators continue to flag softening in labour demand, as seen in the Automatic Data Processing (ADP) employment numbers, which showed private businesses cutting 32 000 jobs in September 2025 after a revised loss of 3 000 in August (The ADP employment numbers are a monthly report that tracks job gains and losses in the US private sector and are often seen as an early indicator of official labour data by global markets).

The September ADP readingwas the steepest decline since March 2023 and the first back-to-back drop since 2020.

On the inflation front, annual consumer prices edged up slightly to 3.0% in September from 2.9% in August, undershooting expectations and reinforcing the view that price pressures remaincontained.

The Fed’s renewed dovishness has underpinned a powerful rally in US equities, with major indices repeatedly touching record highs despite stretched valuations. The continuation of that momentum could spill over into emerging markets, supporting risk sentiment and buoying currencies such as the rand, which may strengthen toward the R17.00 mark against the dollar.

For South Africa, an easing of US monetary policy offers potential breathing space. This may present an opportunity for the South African Reserve Bank to make a modest rate cut of its own in its final meeting of the year, set for 20 November.