European Central Bank policymakers lined up behind further interest rate cuts on Wednesday, indicating that next week's reduction is all but a done deal and further moves will also come even if the U.

The Federal Reserve will hold its first policy meeting of the year on Jan. 28 and 29, where it is widely expected to keep interest rates right where they are after cutting three times since September.

But minutes from their December meeting suggest that the decision was a close call — and that there is no guarantee policymakers will lower rates again anytime soon. The minutes of the central bank’s Dec.

Guggenheim Partners' chief investment officer forecast on Monday that the U.S. Federal Reserve is likely to cut interest rates roughly every quarter in 2025, bringing the reduction to around 75 basis points or even a full percentage point this year.

St. Louis Fed President Alberto Musalem suggests greater caution is warranted on reducing interest rates.

Financial markets are still concerned about inflation. The Fed influences short-term interest rates, which are falling, but longer-term bonds like the 10-year Treasury are a better reflection of inflation expectations.

Fears of elevated interest rates dampened the mood on Wall Street at the start of this year–but cooling core inflation and dovish comments by Federal Reserve governor Christopher Waller have given investors reason to feel a bit more cheerful this week.

It is highly unlikely that the Federal Open Market Committee will cut interest rates on January 29. However, a cut in March or May could be possible.