Core Viewpoint - The latest Wall Street Journal survey indicates that forecasters expect the Federal Reserve to become less independent in its decision-making process [1] Group 1 - The survey reflects a shift in expectations regarding the Federal Reserve's autonomy [1]

Economic Growth - Economic growth has shown resilience in 2025 year-to-date despite negative macroeconomic conditions caused by the trade war and tariffs [1] - The primary reason for this resilience is likely attributed to frontloading [1]

Core Points - The Reserve Bank of New Zealand (RBNZ) cut benchmark interest rates by 50 basis points to 2.5%, the lowest since July 2022, due to growth concerns [1] - RBNZ expects inflation to return to its 2% target by the first half of next year, while weak economic activity is anticipated in mid-2025 [2] - New Zealand's GDP contracted by 1.1% year on year in the second quarter, worse than the 0.9% drop expected, attributed to domestic supply constraints and global economic uncertainty [3] - Growth forecasts for New Zealand's trading partners, especially China and Taiwan, have improved, with the World Bank projecting China's economy to grow by 4.8% in 2025 [4] - Domestic inflationary pressures are moderating, with headline inflation at 2.7% for the second quarter, near the RBNZ's target band of 1%-3% [5]

Market Outlook & Economic Conditions - Uncertainty surrounding government shutdowns and Washington agreement weighs on investors, but underlying fundamentals are lifting markets [3] - Softening labor market and potential inflationary pressures due to tariffs create a complex situation for the Federal Reserve [8] - Political polarization in Washington can erode investor confidence [6] - Northern Trust Asset Management believes the odds of a US recession have decreased [10] Monetary Policy - The market anticipates potential Fed interest rate cuts due to uncertainty [7] - Northern Trust Asset Management expects the Fed funds rate to be approximately 100 basis points (1%) lower over the next 12 months [9] Investment Strategy - Northern Trust Asset Management favors risk assets (stocks) within a balanced portfolio [10] - Recently, the firm has increased exposure to the US market due to increased confidence in a soft landing [10] - Companies doubled earnings estimates last quarter, indicating a strong trend for the year ahead [11]

Group 1 - The RBI's fourth bi-monthly policy aims to enhance credit flow and support growth through measures such as the withdrawal of frameworks related to specified borrowers and allowing M&A financing by Indian banks [1][12] - The extension of timelines for repatriation from foreign currency accounts and simplification of reconciliation processes will improve the ease of doing business for the export sector [2][12] - The focus on enhancing customer satisfaction and improving the use of the rupee in cross-border transactions will strengthen the financial ecosystem and currency outlook [3][12] Group 2 - The RBI maintained the repurchase rate at 5.5% and adopted a neutral policy stance, allowing flexibility for future adjustments [6][12] - With inflation at historic lows, there is significant room for supporting growth, and future policies will be data-driven [7][12] - The principle-based framework for infrastructure lending clarifies risk weights and supports long-term lending practices, contributing to nation-building [9][12] Group 3 - The combination of policy stability, improving consumption, and sustained credit demand positions India for long-term growth [10][12] - GST reforms are providing fiscal support, giving the RBI more flexibility and reducing reliance on monetary easing [10][12] - The RBI's decision to hold rates reinforces stability in the lending environment, with previous rate cuts already making home loans more affordable [11][12]

Indonesia’s new finance minister said he would not consider easing long-standing fiscal restraints until he could prove that Southeast Asia’s largest economy could grow faster by spending more efficiently https://t.co/4SQaxlUNAT ...

Core Viewpoint - The Reserve Bank of India's upcoming interest rate decision is expected to be challenging, with factors such as low inflation and economic growth pressures influencing the potential for rate cuts [1][5]. Economic Outlook - A majority of economists (24 out of 39) predict that the repurchase rate will remain at 5.5%, while 15 anticipate a quarter-point reduction due to deteriorating growth prospects [2]. - The monetary policy committee, led by Governor Sanjay Malhotra, faces competing objectives, with inflation expected to ease further and growth impacted by high US tariffs [3][6]. - Inflation is currently near the lower end of the 2%–6% target band and is projected to decrease further following recent tax cuts [3][7]. Inflation and Growth Projections - The RBI had previously predicted inflation at 3.1% for the current fiscal year, with an economist estimating average inflation around 2.7% [7]. - The tax cuts are anticipated to mitigate the negative effects of tariffs, keeping growth close to the government's forecast range of 6.3%–6.8%, with the RBI projecting 6.5% growth for the fiscal year [8]. Market Reactions - Indian bonds have remained in a narrow trading range, with analysts suggesting that only strong dovish signals from the RBI could trigger a market rebound [9]. - Traders are cautious ahead of the policy meeting, having been surprised by the RBI's recent decisions, including a neutral policy stance and a rate hold despite easing inflation [10]. - The yield on the benchmark 10-year bond has increased by over 30 basis points since the June meeting [10]. Currency Considerations - Traders will be attentive to the governor's comments regarding the currency amidst trade tensions, with some analysts suggesting that the RBI may be allowing the rupee's weakness as a strategy to enhance the competitiveness of Indian exporters [12].

While a majority of economists — 24 of 38 surveyed by Bloomberg News — predict the repurchase rate will remain on hold at 5.5%, 14 expect a quarter-point reduction, citing India’s darkening growth prospects. Even many of those forecasting a hold say there’s justification to ease.The six-member monetary policy committee, led by Governor Sanjay Malhotra, will need to juggle a number of competing objectives this week. Inflation, which is hovering near the lower end of the 2%–6% target band, is expected to eas ...

This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: The U.S. Chamber of Commerce on Friday called on the Trump administration to withdraw its new $100,000 fee for H-1B visas over concerns that it could “impede economic growth.” Among other drawbacks, the fee would stifle domestic job creation as the high cost of the visas would incentivize certain business functions to move overseas, Neil Bradley, chief policy ...

Valuation Metrics - Shiller's CAPE is currently at 40x, the highest level since the dot-com bubble, indicating a potentially expensive market [4] - Trailing P/E stands at about 28x, significantly above historical averages, calculated using earnings from the past 12 months [5] - Forward P/E is approximately 22x, also above historical averages, based on expected earnings over the next 12 months [6] - All valuation metrics suggest that the stock market is expensive, implying weak returns in the future [7] Historical Context - In mid-2014, Shiller's CAPE was about 26x, above its long-term average of 17x, suggesting the market was expensive [8] - The realized CAPE at that time was about 17x, indicating the market was not expensive due to healthy earnings growth in subsequent years [9] Macroeconomic Developments - Inflation is rising, with the core PCE price index up 2.9% year-over-year, above the Federal Reserve's 2% target [13] - Consumer spending increased by 0.3% month-over-month in August, reaching a record annual rate of $21.11 trillion [14] - Business investment activity improved, with core capex orders rising 0.6% to $76.7 billion in August [15] - Initial unemployment claims fell to 218,000, indicating a historically strong labor market [16] Housing Market Insights - Sales of previously owned homes decreased by 0.2% in August, while new home sales surged 20.5% to an annualized rate of 800,000 units [19][20] - The median existing-home sales price rose 2.0% year-over-year, marking the 26th consecutive month of price increases [20] Economic Outlook - The long-term outlook for the stock market remains favorable, supported by expectations for years of earnings growth [23] - Demand for goods and services remains positive, bolstered by healthy consumer and business balance sheets [24] - Economic growth is normalizing, with major tailwinds like excess job openings fading [25] - There is a disconnect between hard economic data and soft sentiment-oriented data, with tangible activity continuing to grow [26] Market Dynamics - The U.S. stock market may outperform the economy in the near term due to positive operating leverage from companies adjusting cost structures [27] - Risks such as political uncertainty, geopolitical turmoil, and energy price volatility remain present [28]