U.S. Federal Reserve Chair Jerome Powell is expected to signal that rate cuts to follow today's decision would require a 'material deterioration in the labour market,' a JPMorgan economist says.

The U.S. Federal Reserve is expected to cut interest rates on Wednesday as policy-makers grapple with gaps in economic data caused by the recent government shutdown and work through competing views about the risks facing the economy.

The anticipated quarter-percentage-point cut may well come with a non-committal or even hawkish approach to next year’s rate path given the division among policy-makers between those skeptical about the need for more rate reductions in the face of still-elevated inflation and those who feel the economy and job market may weaken if the U.S. central bank doesn’t bring

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