A key measure of US corporate-bond valuations reached the most expensive level in nearly three decades as investors raced to lock in still-elevated yields following the Fed's first interest rate cut since 2024 https://t.co/a3bqilEmtv ...

Market Trends - The Federal Reserve's recent interest rate cut is expected to be short-lived, with a maximum total cut of 100 basis points anticipated [2][5] - The current round of monetary easing is not seen as a significant game-changer for investors [2] Housing Market - Lowering interest rates may stimulate some activity in the housing market, but it is unlikely to fully unlock the previously frozen market [3] AI Industry - The rise of AI is viewed as the most significant market development, driving stock movement and the broader economy [3][4] - AI hardware is highlighted as a crucial area of focus, with interest in power sources for AI firms, particularly nuclear energy [4][5]

Group 1 - The dollar index rose by +0.50% due to positive comments from Fed Chair Powell regarding inflation and expectations of limited interest rate cuts by the Fed [1] - US weekly initial unemployment claims fell by -33,000 to 231,000, indicating a stronger labor market than the expected 240,000 [3] - The September Philadelphia Fed business outlook survey increased by +23.5 to an 8-month high of 23.2, surpassing expectations of 1.7 [3] Group 2 - Concerns over Fed independence may lead foreign investors to sell dollar assets, particularly in light of President Trump's attempts to fire Fed Governor Cook [2] - The euro fell by -0.20% due to a stronger dollar and fiscal concerns, as the German government plans to borrow about 20% more than originally planned in Q4 [4] - Germany's finance agency plans to raise 90.5 billion euros ($107 billion) in Q4, which is 15 billion euros more than previously projected [5] Group 3 - The markets are pricing in a 93% chance of a -25 bp rate cut at the next FOMC meeting on October 28-29 [4] - Swaps indicate a 2% chance of a -25 bp rate cut by the ECB at the October 30 policy meeting [6] - The USD/JPY rose by +0.59% as the yen fell to a 1-week low due to a stronger dollar and reduced safe-haven demand following a rally in the Nikkei Stock Index [6]

Group 1 - The dollar index (DXY00) increased by +0.57% due to positive comments from Fed Chair Powell regarding inflation and interest rates [1] - US weekly initial unemployment claims fell by -33,000 to 231,000, indicating a stronger labor market than the expected 240,000 [3] - The September Philadelphia Fed business outlook survey rose by +23.5 to an 8-month high of 23.2, surpassing expectations of 1.7 [3] Group 2 - Concerns over Fed independence may lead foreign investors to sell dollar assets, particularly in light of President Trump's actions against Fed Governor Cook [2] - The euro (EUR/USD) decreased by -0.30% due to a stronger dollar and fiscal concerns from the German government planning to borrow about 20% more than originally intended in Q4 [4] - Germany's finance agency plans to raise 90.5 billion euros ($107 billion) in Q4, which is 15 billion euros more than previously projected [5]

Market Performance - The S&P 500 index increased by 0.5% and is on track to surpass its previous record close from September 15 [1] - The Nasdaq Composite rose by 0.8%, also aiming for a record close [1] - The Dow Jones Industrial Average gained 54 points, reflecting a 0.1% increase [1] Federal Reserve Actions - The Federal Reserve recently lowered interest rates by a quarter of a point [2] - The Fed has forecasted two additional rate cuts by December and a third cut anticipated in 2026 [2]

Core Viewpoint - The Federal Reserve's decision to cut its key borrowing rate by a quarter percentage point is viewed positively by the White House, indicating a cautious approach to monetary policy [1][2]. Group 1: Federal Reserve's Rate Decision - National Economic Council Director Kevin Hassett mentioned that the administration and new Fed Governor Stephen Miran advocated for a larger reduction, specifically a half-point cut, but the Federal Open Market Committee voted 11 to 1 against it [2]. - Hassett expressed that a 25 basis point cut was a broad consensus and a good initial step towards lower rates, despite Miran's preference for a more aggressive approach [3]. - President Trump has previously criticized the Fed and suggested that the benchmark federal funds rate should be 3 percentage points lower than current levels, which is not aligned with the FOMC's future policy projections [4]. Group 2: Economic Context - Despite strong economic growth above 3% in the third quarter, which typically would not support lower interest rates, Trump argues that cuts are necessary to aid the struggling U.S. housing market and manage financing costs for the nation's $37 trillion debt [5]. - Hassett emphasized the importance of assessing economic variables and making incremental reductions, suggesting that the Fed's cautious approach is appropriate given the current economic conditions [6]. - The Fed's decision reflects a balance between various economic models and opinions, with Hassett describing it as a prudent call in light of decelerating inflation that remains above the target [7].

Central Bank Rate Changes - The U.S. Federal Reserve has implemented its first rate cut since December, diverging from other major central banks that have maintained their rates [1] - The Bank of Canada has reduced its key rate to a three-year low of 2.5%, marking its first cut in six months due to a weak jobs market [3] - The Swiss National Bank cut its key rate to 0% in June, with expectations that it will hold rates steady in the upcoming meeting [1][2] Inflation and Economic Outlook - The Swiss National Bank's inflation remains above the lower end of its target band, leading to expectations that negative rates are unlikely in the near term [2] - Sweden's Riksbank has cut rates significantly but anticipates holding rates steady, believing that current price pressures are likely temporary [4] - The Reserve Bank of New Zealand is expected to cut rates again due to domestic and global growth challenges, having already reduced its policy rate to 3% [5] Euro Zone and Future Expectations - Euro zone rate setters have kept their key rate at 2% for the second consecutive meeting, with indications that the ECB's rate cycle may be nearing its end [6] - Markets are pricing in a modest expectation of rate cuts by the ECB by next July [6] - The Federal Reserve signaled that further cuts are likely in October and December to support the job market, amidst a softening job market [7]

For more on the markets, let's bring in Steve Iceman. He is host of the Real Eyesman Playbook podcast and former senior portfolio manager at Newberger Berman. Steve, it's good to have you.Thanks for having me. Um, I mean, weigh in I guess here on on this uh how this infects if it does the macro. It's interesting when you talk about oh uh are they going to be more tolerant of inflation.I've always been of the mind the equity market's not going to freak out about inflation unless the bond market is. Bond mark ...

Wages in Poland grew their slowest since 2021 in August, coming in below analysts’ expectations and raising the prospect of an interest rate cut next month https://t.co/pxUipRWgSd ...

Group 1: Market Overview - French stocks are in positive territory, boosted by the Federal Reserve's 25-basis point interest rate cut and indications of further easing this year [1] - The benchmark CAC 40 index increased by 87.75 points or 1.13%, reaching 7,874.73 [1] Group 2: Company Performance - STMicroElectronics shares rose by 4.3%, Legrand by 3.7%, and Capgemini by 3.2% [2] - Schneider Electric's stock advanced nearly 3%, while other companies like ArcelorMittal, Dassault Systemes, and LVMH saw gains between 1.3% and 2.7% [2] - Michelin's stock decreased by approximately 1.2%, with Eurofins Scientific, Pernod Ricard, and Danone down by 0.4% to 0.7% [2] Group 3: Economic Indicators - The euro area current account surplus fell to EUR 27.7 billion in July from EUR 35.8 billion in June, and down from EUR 31.6 billion in the same period last year [3] - The surplus on goods trade increased to EUR 25 billion from EUR 23 billion, while the surplus on services decreased to EUR 12 billion from EUR 16 billion [3] - Primary income halved to EUR 7 billion from EUR 14 billion, and the shortfall in secondary income narrowed to EUR 16 billion from EUR 17 billion [4] - Over the twelve months to July, the current account surplus was EUR 315 billion or 2% of GDP, down from EUR 394 billion or 2.6% of GDP in the same period last year [4]