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 ...

Core Insights - The H-1B visa program is under scrutiny due to a new $100,000 fee proposed by the Trump administration, which is argued to undermine economic and national security [4][5] - The U.S. Chamber of Commerce supports the H-1B program, stating it has contributed to economic growth since 1990 and that H-1B workers complement rather than displace U.S. workers [4][5] Economic Impact - The proposed fee could impede economic growth by stifling domestic job creation, particularly affecting small and mid-sized firms and startups [5] - The Chamber argues that the high cost of visas may incentivize businesses to move operations overseas, which could reduce the ability of U.S.-educated foreign students to contribute to the economy [5] Recommendations - The U.S. Chamber of Commerce urges the administration to rescind the $100,000 fee and instead collaborate with Congress on reforms to the H-1B program, including increasing the number of visas available annually [5]

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]

Labor Market Data Concerns - Potential delays in the release of jobs data following a shutdown could complicate the Federal Reserve's decision-making process regarding the economy [1] - Over-reliance on a single report like the BLS (Bureau of Labor Statistics) is discouraged; the industry should consider private sector reports like ADP for a broader view of the labor market [2] - The threat of permanent firings, as opposed to temporary furloughs, could further weaken the labor market [2] - The H-1B visa issue adds another layer of complexity and potential disruption to labor market data [3] Monetary Policy Outlook - The initial inclination is to proceed with the planned rate cut for October [3] - The possibility of a December rate cut is uncertain, depending on the resilience of economic growth and stickiness of inflation based on the latest data [4]

U.S. Housing Market - The U.S. housing market is experiencing a shift as mortgage rates have begun to climb, with the average rate on a 30-year fixed mortgage from Freddie Mac rising to 6.30% for the week ending September 25, up from 6.26% the prior week [2][10] - Other reports indicate similar increases, with Bankrate citing a 30-year fixed rate of 6.39% and Zillow data showing 6.45% [2] Federal Reserve Policy - Federal Reserve officials are maintaining a cautious stance on monetary policy, with Chicago Fed President Austan Goolsbee supporting a recent 25 basis point rate cut but warning against further cuts without confidence that inflation is transitory [3][10] - Goolsbee described current Fed policy as "mildly restrictive" and noted a stable, albeit mildly cooling, labor market [3] Economic Outlook - Goldman Sachs President John Waldron indicated that trade is a limiting factor for growth, predicting that the U.S. economy will grow less than its potential in 2025 [4][10] - Despite strong overall consumer spending, lower-income groups are experiencing some stress, with Goldman Sachs Research forecasting real disposable personal income growth of 3.8% in 2025 and consumer spending growth moderating to 2.3% [4] Digital Euro in Europe - The introduction of a digital euro is expected to bring significant changes, with Italy's Economy Minister Giancarlo Giorgetti projecting a two-year rollout, warning of potential "chaos" for existing cryptocurrencies and possible delays for the European Union [5][10] Political Developments - Former President Donald Trump announced plans to continue providing financial aid to U.S. farmers, funded by tariff revenues, until it is confirmed that the tariffs benefit the agricultural sector [6][10] Global Developments - Kurdistan plans to restart oil exports, potentially adding approximately 230,000 barrels of crude per day to the Iraq-Turkey pipeline following an agreement between oil firms and the Iraqi federal and regional governments [7] - Amazon reached a $2.5 billion settlement with the Federal Trade Commission over allegations of misleading customers, which includes a $1 billion civil penalty and $1.5 billion in refunds for about 35 million consumers [7]

Without small businesses and their hiring, already precarious economic growth could be prone to a pullback. ...

Core Viewpoint - The central bank has reduced its interest rate to 4% and indicated that further easing will likely be necessary to stimulate economic growth, with expectations of one rate cut per year over the next three years [1] Group 1 - The central bank's current interest rate is set at 4% [1] - Policymakers anticipate the need for additional rate cuts to support economic growth [1] - A forecast of one rate cut per year is expected for the next three years [1]

Group 1: Central Bank Actions - The U.S. Federal Open Market Committee implemented a 25 basis point rate cut, with only Governor Stephen Miran dissenting for a larger 50 basis point cut [2] - The Bank of Canada also cut rates, while the People's Bank of China maintained its position, and the Hong Kong Monetary Authority followed the Fed's lead [2] - The Bank of England is expected to announce its decision later, followed by the Bank of Japan [2] Group 2: Market Reactions - After a decline on Wall Street, Asian markets rebounded, with S&P 500 e-minis rising 0.5% and Nasdaq futures increasing by 0.7% [3] - European futures are also showing positive movement, with pan-region futures up 0.6%, German DAX futures gaining 0.7%, and FTSE futures increasing by 0.2% [3] - Bond markets rallied, with the yield on 10-year Treasury notes decreasing to 4.068% from 4.076% [3] Group 3: Commodity and Currency Movements - The dollar remained stable at 97.024 after recovering from a three-and-a-half-year low [4] - Gold prices fluctuated, last trading at $3,659.40 per ounce after reaching a record high [4] Group 4: Company-Specific Developments - Santos shares fell by as much as 13.6% after a consortium led by ADNOC withdrew its $18.7 billion bid due to failure to agree on commercial terms [6] - Brent crude oil prices decreased by 0.2% to $67.84 per barrel [6] Group 5: Upcoming Economic Indicators - Key corporate earnings reports are expected from Auto Trader Group, Embracer Group, and Next [6] - The UK will release GfK Consumer Confidence data for September [6] - France is set to conduct government debt auctions for various maturities [6]

Group 1 - The Federal Reserve is signaling a dovish stance with two more quarter-point interest rate cuts expected, indicating a divergence from Trump's pro-growth economic policies [1][2][3] - The second quarter GDP growth was reported at 3.3%, with the Atlanta Fed projecting the same growth rate for the third quarter, while the Fed's own projections are significantly lower at 1.6% for this year and 1.8% and 1.9% for the next two years [2][3] - There is a notable gap between Trump's expected economic growth of 3-4% and the Fed's forecast of less than 2%, suggesting a fundamental disagreement between the central bank and the administration [3][5] Group 2 - The Federal Reserve has reportedly lost nearly $200 billion due to a mismatch of assets and liabilities, with some estimates suggesting losses could reach $250 billion [6][7] - The Fed's current management is criticized for poor financial performance, as they are paying banks higher interest rates than what their portfolio generates [6][7] - There is an expectation that Trump will appoint new members to the Fed who align more closely with his economic policies, which could lead to a more favorable environment for growth [7]

The Federal Reserve has a mandate to create maximum employment.They won’t have the intended impact of stimulating economic growth and reinvigorating the job market by only cutting 25 basis points.The market has already priced that in.They should do 50 basis points and show they are serious about supporting the economy. ...