Core Insights - The Federal Reserve's decision to lower interest rates by a quarter point aligns with expectations, paving the way for potential further declines in Q4 2025 [1] - Despite a dovish signal from the Fed, the US dollar has strengthened, indicating a market correction as traders take profits [2] - The market anticipates three interest rate cuts in 2025, but current GDP growth data does not suggest an imminent recession [3] Interest Rates and Economic Indicators - The 10-2 year bond yield spread remains positive, indicating a balanced economic situation, while the US manufacturing PMI has been below 50 since February, signaling weakness [4] - The potential for inflation to rise could stabilize interest rates, with three rate cuts already priced in for 2025 [5] - The upcoming PCE index publication on September 25th is crucial for assessing inflation trends [6] Currency and Market Trends - The decline in US interest rates may lead to speculation around the US dollar, with stronger-than-expected inflation data potentially boosting EUR/USD and other dollar-related pairs [7] - A rotation from tech stocks to the industrial sector is observed, with the Dow Jones poised for a potential breakout above $48,000 [8]