Monetary Policy Outlook - Morgan Stanley no longer anticipates a December Fed rate cut [1] - The bank now forecasts three rate cuts in 2025: January, April, and June [1] - Morgan Stanley maintains its terminal rate forecast at 3-325% [1] Economic Indicators - Stronger payrolls data reduces the perceived risk of rising unemployment [1]

Stablecoin Risks - Dutch central bank governor Olaf Sleijpen warns a stablecoin run could force the ECB to adjust interest rate path [1] - Potential effects of stablecoin run extend to Europe's economy and inflation [1] - U_S_ dollar stablecoins surged 48% this year [1] - U_S_ dollar stablecoins now exceed $300 billion [1] - Large-scale redemptions of stablecoins backed by U_S_ Treasuries could trigger rapid sell-offs [1] - Rapid sell-offs could lead to systemic global risks [1]

Monetary Policy Considerations - The Federal Reserve's upcoming decision is viewed as an agonizing one, with market probabilities at 50/50 [1][2] - The Fed funds rate is currently in a range of 3.75% to 4% [5][6] - Some believe the neutral Fed funds rate is much lower, potentially leading to a 50 basis point cut [6] - The real neutral Fed funds rate (adjusted for inflation) is estimated to be between 0.75% and 1% [7] - A neutral nominal Fed funds rate of 2.75% assumes inflation will return to 2%, but it's currently running at 2.75% to 3% [8] - Adding the current inflation rate (2.75% to 3%) to the real neutral rate (0.75% to 1%) yields a nominal rate of 3.5% to 3.75% [9] - The market is seeing more hawkish voices emerge because the Fed is closer to neutral, having already cut rates by 25 basis points in October [11] - The Fed needs to assess whether the labor market weakness is cyclical, due to the shutdown, or structural (mismatches between jobs and job seekers) [13] Economic Factors Influencing the Fed - Near-term tariffs are slowing growth [3] - Immigration policies and uncertainty around 12 to 15 million immigrants in the workforce are affecting supply and hurting growth [4] - The government shutdown has hurt growth, but its resolution will help [4][12] - Tailwinds in 2026 include the unwinding of the shutdown, tax incentives, and regulatory relief [4] - The AI data center power boom is considered near neutral on the Fed funds rate [5] - Inflation has been sticky and running 0.75% to 1% above target [12]

Monetary Policy - St Louis Fed President Alberto Musalem suggests caution with further interest rate reductions [1] - Inflation remains above the central bank's 2% target [1]

Economic Outlook - The discussion revolves around the state of the economy [1] - The strength of the labor market is a key focus [1] - The impact on the Federal Reserve's interest rate outlook is being analyzed [1] Expert Commentary - Roger Ferguson, former Federal Reserve Vice Chairman, provides insights [1] - Saira Malik, Nuveen CIO, shares her perspective [1]

Interest Rate Decision - Bank of England维持英国关键利率在4%不变[1] - 市场预期英国可能在圣诞节前降息，但前提是预算没有阻碍[1] Market Outlook - 投票结果显示降息的可能性比市场预期的更高[1]

Economy & Labor Market - The report discusses the state of the economy and the strength of the labor market [1] Monetary Policy & Inflation - The report addresses the impact on the Fed's interest rate outlook and inflation concerns [1]

Monetary Policy & Interest Rates - The market is pricing in a potential interest rate cut in December, although some committee members prefer to wait for further data [1] - The speaker believes the Fed can and should cut rates, potentially quicker, but respects concerns about inflation [1][2] - Current inflation metrics show core PCE at approximately 250 basis points (25%) over six months, with other metrics closer to 300 basis points (30%) [2] - The speaker argues that current inflationary expectations do not prevent the Fed from acting, citing 5-year inflation break-evens at 250 basis points (25%) [3] - The interest rate tool is less effective on capital expenditure (capex) for large companies funded by free cash flow, but significantly impacts small businesses and low-income individuals [15][16] - Keeping interest rates 100 basis points (1%) higher than necessary costs the US government $100 billion per annum, given that 90% of US Treasury financing is in two-year instruments [16] - A rate cut could help the housing market by lowering mortgage rates, stimulating home building, and increasing labor mobility [12][13] Labor Market Dynamics - Significant labor displacement is expected in the next few years due to technology advancements, as evidenced by announcements from companies like Amazon and UPS [4] - Productivity is increasing across various sectors, including inventory management, logistics, and predictive maintenance, leading to lower costs and increased M&A activity [6] - Companies are generally comfortable with their current labor force, with some freezing hiring and others proactively reducing labor [8] - Recent data, excluding the non-cyclical healthcare sector, indicates negative job growth, which is expected to persist [9] Economic Outlook & Risks - The US economy and companies are generally in good shape, but the labor market is not as strong [10] - The amount of US debt is a tail risk, especially given that 89% to 90% is short-term (two years), requiring constant refinancing [18][19] - The speaker believes the US can deleverage the economy if nominal GDP remains above the cost of debt, targeting 5% nominal GDP growth [21] - Complacency and excessive risk-taking in the market are concerns, but the speaker does not see a bubble in public markets due to strong free cash flow generation by major companies [23][25][26] - The economy is bifurcated, with strong capex and high-income spending, but weaker low-income spending [24]

Welcome back. We're following the latest move from the Federal Reserve. The central bank cutting its benchmark interest rate by a quarter point, lowering it to 3.75% to 4% range.It's the lowest it's been in about three years. But because of the government shutdown, officials were forced to make this major decision without key economic data. And joining us now, Justin Wolfers, professor of economics and public policy at the University of Michigan.Uh, always good to have you here. So, what's your initial take ...

get some insights on yesterday's Fed rate decision from Jeremy Seagull. He is chief economist at Wisdom Tree. He's also professor emeritus of finance at University of Pennsylvania's Wharton School of Bus business. And uh Jeremy, we were speaking earlier today with Roger Ferguson, the former vice chair at the Fed. His take was kind of interesting on this that first of all, he applauded that J. pal very firmly said that this is not a a glide path that the next rate cut may not be happening on this and he's a ...