Core Viewpoint - The Central Bank of Brazil has decided to maintain the benchmark interest rate at 15%, aligning with market expectations and reflecting ongoing economic uncertainties [2][4]. Group 1: Economic Context - A survey of 40 economists indicated a consensus that the Central Bank would keep the rate unchanged at 15% [4]. - The monetary policy committee highlighted that the global environment remains uncertain due to U.S. economic policies and geopolitical tensions, necessitating caution for emerging markets [4][5]. - Domestic economic growth is expected to slow, although the labor market remains strong [4]. Group 2: Inflation and Monetary Policy - Recent data shows improvements in overall and core inflation indicators, yet they still exceed the inflation target [4]. - The committee noted that inflation expectations are unanchored, and high inflation forecasts persist, requiring a prolonged period of tight monetary policy to ensure inflation converges to target levels [5]. - The decision to maintain the Selic rate at 15% is deemed consistent with strategies aimed at stabilizing inflation while also smoothing economic fluctuations and promoting full employment [5]. Group 3: Future Outlook - The monetary policy committee remains vigilant and may adjust future monetary policy steps, including potentially resuming the rate hike cycle if deemed appropriate [5]. - Economists project Brazil's GDP growth for 2026 to be 1.78%, slightly down from a previous estimate of 1.80% [5].

Core Viewpoint - Federal Reserve officials are collectively opposing interest rate cuts, expressing concerns over inflation and economic growth pressures [2][4]. Group 1: Federal Reserve Officials' Stance - Kansas City Fed President Jeff Schmieding voted against the rate cut, citing concerns that economic growth and investment could exert upward pressure on inflation [2]. - Schmieding noted that the job market is generally balanced, and inflation remains above the Fed's 2% target for over four years [2]. - Dallas Fed President Lorie Logan stated she sees no reason for a rate cut this week and emphasized the need for clear evidence of falling inflation or a cooling labor market before considering a December cut [4]. Group 2: Voting Dynamics and Future Implications - Schmieding's dissenting vote marks his first since joining the Fed in 2023, and he is now a voting member of the FOMC [3]. - Logan's comments indicate a potential debate within the Fed regarding the need for further easing to support the labor market versus the need to remain vigilant about inflation [4]. - The bond market adjusted its expectations for a December rate cut, now reflecting a roughly 50% probability of a cut, down from previous assumptions of a more certain cut [4]. Group 3: Additional Perspectives - Cleveland Fed President Loretta Mester expressed a preference to maintain a degree of tightening to help bring inflation back to target, despite not having voting rights this year [6]. - Mester believes the recent rate cut brings the federal funds rate close to her estimated neutral rate, which neither overly stimulates the economy nor imposes additional constraints [7].

Core Viewpoint - Federal Reserve officials are collectively opposing interest rate cuts, indicating concerns about inflation and economic growth pressures [2][4][5]. Group 1: Federal Reserve Officials' Stance - Kansas City Fed President Jeff Schmieding voted against the rate cut, citing worries that economic growth and investment could exert upward pressure on inflation [2]. - Schmieding noted that the job market is generally balanced, and inflation remains above the Fed's 2% target, with consumer prices rising 3% year-over-year as of September [2]. - Dallas Fed President Lorie Logan stated there was no need for a rate cut this week and expressed skepticism about the necessity of a cut in December unless clear evidence of falling inflation or a cooling labor market emerges [4][5]. Group 2: Market Reactions and Future Expectations - The dissenting votes from Schmieding and Logan suggest an intense debate within the Fed regarding the need for further easing to support the labor market versus the need to remain vigilant about inflation [5]. - Following these statements, the bond market adjusted its expectations for a December rate cut, now estimating a roughly 50% chance of a cut [5]. - Cleveland Fed President Loretta Mester also expressed opposition to rate cuts, emphasizing the need for a degree of tightening to help bring inflation back to target [6].

Market Performance - The Nikkei 225 index has reached a historic high, surpassing 52,000 points for the first time, with an intraday increase of over 1,000 points and a rise of more than 2% [1][2] - The Tokyo Stock Exchange index also hit a record high, with semiconductor, consumer, and electric power sectors leading the gains [1] Company Highlights - Semiconductor design company Socionext saw its stock hit the limit up, with a gain of 16.72%. The company is set to hold an earnings meeting on October 31, where it is expected to announce mid-term performance up to September 30, 2025 [2] - Socionext has begun developing 3nm ADAS and customized SoCs for autonomous driving, with production expected to start in 2026, utilizing TSMC's N3A process [2] - Other notable stock performances include Renesas Electronics and Hitachi, both rising over 9%, while Kansai Electric Power increased over 6% [2] Economic Indicators - Tokyo's core consumer price index (CPI) for October rose by 2.8% year-on-year, exceeding the Bank of Japan's 2% inflation target for over three years [2][3] - The CPI increase was higher than the market expectation of 2.6% and up from 2.5% in September [2] Monetary Policy - The Bank of Japan decided to maintain the policy interest rate at approximately 0.5%, marking the sixth consecutive meeting without a rate change [5] - The decision was made despite predictions of a potential rate hike to curb unexpected inflation, with a vote of 7 in favor and 2 against maintaining the current rate [5] - Bank of Japan Governor Kazuo Ueda indicated that the central bank will continue to monitor overseas economic conditions and their impact on Japan [5][6]

Core Points - The European Central Bank (ECB) has decided to maintain interest rates at 2%, marking the third consecutive meeting with no changes, despite market volatility due to trade relations [1][3] - The ECB has cut rates by 2 percentage points over the past year but has since adopted a wait-and-see approach, as inflation has reached the policy target of 2%, which other major central banks have not yet achieved [1][6] - Following the announcement, the euro fell by 0.23% against the dollar, trading at 1.1572 [1] Summary by Sections Monetary Policy - The ECB's deposit facility rate, main refinancing rate, and marginal lending rate remain unchanged at 2%, 2.15%, and 2.40% respectively [3] - The ECB aims to ensure medium-term inflation stability at the 2% target and has not committed to a specific interest rate path, indicating readiness to adjust all tools based on data and meeting reviews [6] Economic Outlook - The ECB maintains its assessment of inflation near the 2% target, with decisions based on inflation outlook and risks, while the eurozone economy continues to grow despite global trade tensions and geopolitical uncertainties [6][7] - The ECB is gradually reducing its asset purchase programs (APP and PEPP) as the euro system stops reinvesting the principal of maturing securities [6] Market Reactions - Analysts suggest that further rate cuts will require signs of data deterioration, with a high threshold for additional cuts despite some council members favoring a "risk management" approach [7] - The latest data shows the eurozone's inflation rate at 2.2% in September, above the 2% target, providing confidence for the ECB to pause rate cuts [7][8] - Most economists view eurozone inflation as moderate, with recent increases in German inflation still close to long-term averages, supporting the ECB's decision to hold rates steady [8]

Group 1 - Gold prices are currently trading above $3967, with a recent report showing a price of $3971.87 per ounce, reflecting a 1.10% increase, while the highest price reached was $3981.64 and the lowest was $3914.92 [1] - The Federal Reserve's recent decision to lower the benchmark interest rate by 25 basis points to a range of 3.75%-4% has created a mixed sentiment in the market, with some members advocating for a more aggressive cut of 50 basis points [1][2] - The employment market is showing signs of cooling, with job growth slowing and unemployment rates rising, although still at low levels, indicating potential risks to economic activity [2] Group 2 - The Federal Reserve plans to halt balance sheet reduction starting December 1, with maturing agency debt being reinvested into Treasury securities, which may influence market liquidity [1] - Analysts suggest that the gold market is at a crossroads, with a potential decline in prices if the upcoming U.S.-China-Korea summit does not yield positive results and if expectations for a December rate cut continue to diminish [3] - The recent CPI data indicates that inflation remains relatively high, with core PCE potentially hovering around 2.3% to 2.4%, suggesting that inflationary pressures are still a concern for the Federal Reserve [2]

Core Viewpoint - The Federal Open Market Committee (FOMC) has decided to lower the federal funds rate by 25 basis points, bringing the target range from 4.00%-4.25% to 3.75%-4.00%, marking the second rate cut of the year [1][2] Economic Conditions - The U.S. economy is expanding at a moderate pace, with employment growth slowing and a slight increase in the unemployment rate, although it remains low as of August [3] - Inflation has risen since the beginning of the year and remains at a high level, with the Fed aiming for full employment and a 2% inflation target over the long term [3][4] Employment Risks - There is an increasing risk of a downturn in employment, with signs of pressure on low-income households and a rise in layoff announcements, although these have not yet led to an increase in unemployment claims [3][4] Inflation Concerns - Higher tariffs are contributing to price increases in certain categories, leading to overall inflation rising, but these effects may be temporary [4] - The Fed is closely monitoring the potential for persistent inflation impacts, which could complicate monetary policy [4] Monetary Policy Adjustments - The Fed has decided to end its quantitative tightening (QT) program, concluding the reduction of its balance sheet on December 1, after three and a half years [2][4] - The decision to stop QT means that the principal from MBS redemptions will be reinvested in short-term U.S. Treasury securities [4] Internal Disagreements - There are notable divisions within the Fed regarding future rate actions, with some members advocating for a 50 basis point cut while others prefer to maintain current rates [5][6] - Powell indicated that the lack of data due to the government shutdown could lead to a more cautious approach in future decisions [6] Market Reactions - Following Powell's comments, market sentiment shifted, with the Dow Jones falling by 0.16% and the S&P 500 declining slightly, while the Nasdaq rose by 0.55%, reaching a new closing high [2][6] - Market expectations for a December rate cut are currently at 67.8%, with a 32.3% probability of maintaining current rates [6]

Core Viewpoint - The Federal Reserve has lowered the federal funds rate by 25 basis points and announced the end of balance sheet reduction starting December 1. There is significant disagreement among committee members regarding future rate cuts, indicating that further cuts are not guaranteed [1][4][12]. Monetary Policy Outlook - The prospect of another rate cut in December is uncertain, with some members suggesting a pause in rate changes [3][13]. - The composition of the balance sheet remains a long-term process, with adjustments expected to be gradual [3]. - The labor market is showing signs of cooling, but there is no significant increase in job market weakness, with job vacancies remaining stable [3][7]. Inflation Insights - Inflation pressures are still present, with the September CPI showing a more moderate increase than expected. Core PCE inflation, excluding tariffs, is estimated to be around 2.3% to 2.4% [3][9][27]. - Tariffs are contributing to rising prices in certain goods, leading to overall inflation increases [9][10]. - The overall PCE price index increased by 2.8% over the past 12 months, with core PCE also rising by 2.8% [9][27]. Economic Activity - Economic activity is expanding at a moderate pace, with GDP growth for the first half of the year at 1.6%, down from 2.4% the previous year [5][46]. - Consumer spending has shown strength, which may lead to better-than-expected economic growth [6][44]. - Investment in equipment and intangible assets continues to grow, while housing market activity remains weak [7]. Labor Market Dynamics - The labor market is experiencing a gradual cooling, with a notable decline in labor supply impacting employment [7][8]. - The unemployment rate remains relatively low, but job growth has slowed significantly since the beginning of the year [7][36]. - There are concerns about rising risks to employment, particularly in light of recent layoffs announced by major companies [8][32]. Balance Sheet Management - The Federal Reserve will stop balance sheet reduction as it has reached a level deemed sufficient for "ample reserves" [14][18]. - The balance sheet has shrunk by approximately $2.2 trillion over the past three and a half years, with its size relative to nominal GDP decreasing from 35% to about 21% [14][19]. - The Fed plans to reinvest proceeds from maturing agency securities into short-term Treasury bills to adjust the balance sheet structure [15][24]. Market Reactions and Future Considerations - The market has priced in expectations for further rate cuts, but the Fed emphasizes that such actions are not predetermined [15][22]. - The committee's discussions reflect a range of opinions on the economic outlook, with some members advocating for a pause to assess the situation further [16][35]. - The potential impact of government shutdowns on economic data and decision-making processes is acknowledged, with a cautious approach suggested in the absence of reliable data [21][31].

Core Viewpoint - The Federal Reserve has decided to lower the federal funds rate target range by 25 basis points to 3.75%-4.00%, marking the fifth rate cut since September 2024, aligning with market expectations [1] Economic Assessment - Economic activity is expanding at a moderate pace, with employment growth slowing and a slight increase in the unemployment rate, although it remains low as of August [2] - Inflation has risen compared to the beginning of the year and remains at relatively high levels, with the committee aiming for maximum employment and a long-term inflation target of 2% [2] - There is a high level of uncertainty regarding the economic outlook, with increased downside risks to employment noted in recent months [2] Future Policy Outlook - To support its goals and consider changes in risk balance, the committee has decided to lower the federal funds rate target range by 25 basis points to 3.75%-4.00% [3] - The committee will carefully evaluate the latest data, changes in the economic outlook, and risk balance when considering further adjustments to the federal funds rate target range [3] Monetary Policy Stance - The committee will continue to monitor new information affecting the economic outlook when assessing the appropriate monetary policy stance [4] - If risks that could hinder the achievement of the committee's goals arise, the committee will adjust its monetary policy stance as necessary [4] End of Balance Sheet Reduction - The Federal Reserve's FOMC statement announced the end of balance sheet reduction on December 1, with current monthly reductions of $5 billion in U.S. Treasuries and $35 billion in MBS [5] Divergence in Federal Reserve Opinions - The recent Federal Reserve rate decision reflects a rare "hawk-dove" split, indicating significant internal divergence regarding economic outlook assessments [6] - The lack of timely economic data due to the federal government shutdown has complicated the Fed's understanding of economic conditions, leading to increased uncertainty around their stance since September [6]

Core Viewpoint - The Federal Reserve has lowered the benchmark interest rate by 25 basis points to a range of 3.75%-4.00%, marking the second consecutive rate cut, aligning with market expectations [1][2]. Group 1: Interest Rate Decision - The Federal Open Market Committee (FOMC) decided to reduce the federal funds rate target range by 25 basis points due to a moderate expansion in economic activity and rising inflation [2]. - The decision reflects a balance of risks, with increased downward risks to employment noted in recent months [2]. Group 2: Voting Members - The members supporting the monetary policy action include Jerome H. Powell, John C. Williams, and several others, while Stephen I. Miran and Jeffrey R. Schmid opposed the decision [3]. Group 3: Asset Purchase Program - The FOMC announced the end of its balance sheet reduction program effective December 1, with current monthly reductions of $50 billion in U.S. Treasuries and $35 billion in mortgage-backed securities [1][2]. - After this date, the principal repayments from mortgage-backed securities will be reinvested into short-term U.S. Treasuries [1].