Federal Reserve Forecasts Two Rate Cuts for Late 2025, Continues Quantitative Tightening

Speculation regarding the Federal Reserve initiating "money printing" or quantitative easing (QE) in the third and fourth quarters of 2025 has been contradicted by recent official statements and economic forecasts. Instead, the U.S. central bank is projected to implement two interest rate cuts later this year while continuing its process of quantitative tightening (QT).

The claim, shared by crypto influencer Ash Crypto, stated, "The FED is about to start the money printers in Q3 - Q4 and Trillions will flow into crypto market. Just survive few more months, i promise you, our patience will be rewarded soon." This assertion diverges significantly from the Federal Reserve's communicated monetary policy.

At its June 2025 meeting, the Federal Open Market Committee (FOMC) maintained the federal funds target rate at 4.25% to 4.50%. While holding rates steady, the Fed's updated projections indicate a median expectation for two 25-basis-point rate reductions before the end of 2025, likely in September and December. This move aims to support economic growth amidst a resilient but moderating labor market and persistent, albeit moderating, inflation.

Furthermore, the Federal Reserve is actively engaged in quantitative tightening (QT), a process that reduces its balance sheet by allowing maturing securities to roll off without reinvestment, thereby withdrawing liquidity from the financial system. Effective April 2025, the Fed slowed the pace of its Treasury securities runoff to $5 billion per month from $25 billion, while maintaining a $35 billion monthly cap for mortgage-backed securities. This measured approach to balance sheet reduction, which has already seen a $2.29 trillion decrease since June 2022, is distinct from quantitative easing, which involves expanding the balance sheet through asset purchases.

Analysts and the Federal Reserve's own Monetary Policy Reports highlight that inflation, particularly influenced by factors like recent tariff policies, remains somewhat elevated above the Fed's 2% target. The central bank's current "wait-and-see" stance reflects a cautious approach to economic data, balancing inflation control with economic stability. The notion of a new wave of quantitative easing is not supported by current policy guidance or economic forecasts from reputable financial institutions.