Economic Policy Insights - The current economic conditions do not warrant a shift away from a restrictive policy setting, indicating that the policy remains at a clearly restrictive level [1] - The labor market has shown solid conditions with strong job creation, but recent revisions to job creation numbers suggest a potential softening in the labor market [2] - The balance of risks between inflation and economic growth is moving toward greater equality, suggesting a potential shift toward a neutral policy stance [3] Interest Rate Decisions - There was no widespread support for a larger than 25 basis points rate cut during the recent meeting, indicating a cautious approach to monetary policy adjustments [4] - The company has implemented significant rate hikes and cuts in the past five years, typically in response to misalignments in policy, but currently feels that the existing policy is appropriate [5] - The company is reacting to evidence of softening in the labor market and lower job creation levels, which may warrant a change in policy direction [6]

Chair Powell, do economic conditions and the balance of risks no longer warrant a restrictive policy setting. So I don't think we can say we can say that. What we can say is this, that over the course of this year, we've kept our policy at policy at a restrictive level and people have different views, but a clearly restrictive level, I would say so.And we were able to do that over the course of this year because the labour market was in very solid condition with strong job creation and all those things. I t ...

Chair Pal, do economic conditions and the balance of risks no longer warrant a restrictive policy setting. So I don't I don't think we can say we can say that. What we can say is this that over the course of this year we've kept our poly policy at a restrictive level and and people have different views but a clearly restrictive level I would say.So and we were able to do that uh over the course of this year because the labor market was in very solid condition with strong job creation and all those things. I ...

Economic Policy Insights - The current economic conditions suggest that a restrictive policy setting may no longer be warranted, although the policy has remained at a restrictive level throughout the year [1] - The labor market has shown solid conditions with strong job creation, but recent revisions indicate a decline in job creation numbers from April to August, shifting the risks towards inflation [2] - The balance of risks between inflation and economic growth is moving towards equality, indicating a potential shift towards a neutral policy stance [3] Interest Rate Decisions - There was no widespread support for a 50 basis point rate cut, reflecting a consensus that the current policy is appropriate given the economic context [4] - The company believes that the policy has been effective this year, with a cautious approach to changes based on evolving tariffs, inflation, and labor market conditions [5] - The recent evidence of softening in the labor market suggests that while risks are not fully balanced, they are moving towards balance, justifying a change in policy direction [5]

Market Reaction - The markets are experiencing a bounce, with the S&P turning positive and the Dow increasing from 260 to over 400 points [1][10] - The S&P 500 saw a rise of approximately 15 points after initially being down by 6 points [10] Federal Reserve Statement - The Federal Reserve issued a cautious statement acknowledging inflation and the labor market, resulting in a 25 basis point cut [3][8] - The Fed's median projection indicates an expectation of 50 basis points more in rate cuts for 2025, aligning with market expectations [5][7] Dissenting Opinions - Steven Myron, a recent appointee from the Trump administration, dissented in favor of a half-point cut, highlighting differing views within the committee [5][6] - Among the 19 officials, nine see two additional cuts in 2025, while six officials do not anticipate any further reductions [6][7] Market Trends - The 10-year bond yield decreased from 4.05% to 4.01%, indicating a shift in investor sentiment [11] - The market's initial reaction was characterized by volatility, but it ultimately settled into a rally [9][10]

The Federal Reserve has returned to easing mode after ten months of taking a wait and see approach on the U.S. economy. In a widely expected move on Wednesday, the U.S. central bank cut its benchmark fed funds interest rate range by 25 basis points to 4%-4.25%, the lowest since December 2022, in what Fed chair Jerome Powell called a "risk management cut." The Fed acknowledged that economic growth in the first half of the year "moderated" and the job market has "slowed." This slowdown, Powell said during ...

Joining me now are Michael Gapen, chief US economist at Morgan Stanley Anastasia Amaroso, chief investment strategist for private wealth at Partners Group. Thank you both very much for being here. Uh Michael, let's start with you because we were just discussing with Steve that there's uh you know expected to be some dissent over the quarter point cut.Uh, do you think that's more emblematic of the macro uncertainty that's out there or just the the fireworks and the politization and all the various headlines ...

If you look at uh the CME Fed watch, 96% chance, a 25 basis point cut. It seems to be the consensus we're going to get something. Is 50 basis points possible.I don't think so. I think you get 25 basis points. And I think the the more uh interesting dynamic surrounding this afternoon's Fed meeting is how many descents do we get.We potentially could get three descents. That's the first time since 1988. the dissents will be regarding what you're speaking toward, which is we should get a 50 basis point cut.So, ...

What are you expecting actually from the Fed. 25 basis point cuts. And then we have a bigger idea of what happens next.I think you're going to get 25 basis point cuts. You could get some dissents here because you've had the signals for 50 basis points from a few of the governors. But 25, I think, is really done.After the August employment report came out, it became very clear that they're going to really take a look at the employment mandate. But I would just still emphasize that inflation remains sticky he ...

Drop your 🇺🇸 FED rate cut predictions25 BPS or 50 BPS ? ...