Group 1 - The Federal Reserve is expected to announce a 0.25% rate cut, marking its third cut of the year, with an 87% probability indicated by CME Group data [1] - The Fed will release its final Summary of Economic Projections (SEP) for 2025, which includes forecasts on economic growth, inflation, and interest rates [2] - Investors are anticipating potential changes to the Fed's outlook, particularly regarding interest rate cuts in 2025 and 2026 [2] Group 2 - There is a focus on potential disagreements among Fed officials, as indicated by two members voting against the previous rate cut decision in October [3]

The Federal Reserve will issue updated economic and rate projections Wednesday ...

Group 1 - The article does not provide any specific content related to a company or industry [1]

The German government is set to raise its economic forecasts, bringing official projections into line with those of the country’s leading research institutes, people familiar with the matter said https://t.co/7V980VwoG8 ...

Core Viewpoint - The Bank of Canada is set to release baseline projections for the economy and inflation in its upcoming monetary policy report, following a period of uncertainty regarding the impact of U.S. tariffs on the Canadian economy [1][2] Economic Projections - The central bank had previously refrained from providing definitive economic estimates due to uncertainties surrounding U.S. tariffs, but now expects to present a baseline projection for growth and inflation [2] - The economy is anticipated to grow in line with the "current tariff scenario" outlined in the July monetary policy report [6] Monetary Policy - The Bank of Canada reduced its key policy rate to 2.5%, the lowest in three years, and indicated readiness for further cuts if economic risks increase [3] - Money markets are pricing in a 55% chance of an additional 25 basis point rate cut on October 29 [3] Inflation and Tariffs - The Governing Council noted that most counter-tariffs on U.S. goods have been removed, reducing the risk of inflationary pressures from tariffs on Canadian consumers [4] - Lower input costs from labor, shipping, and materials are expected to contribute to lower inflationary pressures in the future [4] Economic Growth Factors - Economic growth may slow further due to adjustments in business investment and employment, with slower population growth and a softer labor market potentially dampening household spending [5] - Weak business investment is expected to continue affecting economic growth in the latter half of the year [5]

Economic Projections - The U.S. Federal Reserve forecasts economic growth through 2028, with GDP estimates for 2025 increasing from 1.4% to 1.6%, and further growth to 1.8% in 2026 and 1.9% in 2027 [1] - The Fed projects a decline in the unemployment rate from 4.5% currently to 4.2% by 2028 [2] Interest Rate Decisions - Despite positive economic forecasts, the Fed cut interest rates, which is typically associated with recessionary conditions [2][3] - The Fed's dot plot indicates a decline in interest rates toward 3% over the next few years, suggesting more rate cuts than previously anticipated [3][4] Market Reactions - The S&P 500 reached a record high of 6,631.96, up 0.48% for the day and nearly 13% year-to-date, reflecting investor enthusiasm for lower interest rates [5] - Concerns arise from analysts like Liz Thomas, who suggest that the market may be overvalued or "frothy" due to the ongoing rate cuts [5]

🇺🇸 NEXT WEEK’S FOMC IS GOING TO BE HUGE FOR CRYPTO.Not only could we see a rate cut, but also fresh economic projections and the Fed’s dot plot.That means we’ll get a clear picture of how many cuts they see this year and beyond. https://t.co/xVvMMF1Mv8 ...

Federal Reserve Policy & Messaging - The market anticipates a 25 basis points (0.25%) rate cut at the next Federal Reserve meeting [1] - The Federal Reserve's messaging is crucial, particularly regarding the tone Chair Powell will adopt at the press conference [1] - Internal disagreements among Federal Reserve members could lead to mixed messaging regarding future rate cuts [2] - Individual forecasts within the Summary of Economic Projections (SEP) may reflect personal agendas and signaling for future leadership roles rather than purely economic forecasts [4][7] - The dot plot in the SEP may exhibit a wide dispersion, reflecting differing views on appropriate interest rate levels [5] - Changes in the composition of the Federal Open Market Committee (FOMC) due to potential appointments could further complicate the interpretation of the SEP [6][7] - The Federal Reserve chair's influence is potentially diminishing, impacting the ability to guide the committee [8][9] Global Central Bank Divergence - The European Central Bank (ECB) signals the end of disinflation, contrasting with the potential rate-cutting cycle in the U S [10] - Divergence in central bank policies impacts foreign exchange rates, particularly the US dollar [11] - Central banks primarily focus on domestic objectives, even within a globalized economy [13][14] - Federal Reserve actions can significantly impact other central banks, potentially complicating their efforts to manage domestic economic conditions [15]

Market Outlook & Fed Policy - The market has priced in many positives, leaving room for the Federal Reserve to disappoint next week [2] - The key focus will be on the Summary of Economic Projections (SEP) and the committee's rate guidance for the end of 2026; a convergence with the rates market is needed to avoid disappointment [3][4] - A weakening labor market is a defining macro characteristic, suggesting growth-side risks for the equity market and the need for a bond position [10][11] Investment Strategies - Broadening investment portfolios beyond tech is recommended, considering areas like small caps, energy, and international markets [6][7][8] - Small caps are poised to benefit from declining interest rates due to their floating rate and short-term debt structures, along with less regulation and more M&A activity [7] - Offsetting equity positions with a bond position (duration) is suggested, especially given the potential for a pullback in the second half of September [9] Interest Rate & Bond Market - The market anticipates a 25 basis point rate cut next week [2][3] - The yield curve is positively sloped now, suggesting that rates across the curve should come down as the Fed starts its rate-cutting cycle, unlike the previous year when the yield curve was inverted [16][17] - Expect the 10-year Treasury yield to break below 4%, surprising many due to recency bias related to the bond market's reaction to previous rate cuts [18] Economic Indicators - Despite concerns about the labor market, other data points like GDP growth, company earnings, and consumer strength suggest a continued strong economy [13]

Fed Policy & Interest Rates - The CNBC Fed survey projects the Fed funds rate to be at 389% by the end of the year [1] - The base case expectation is that the Fed will cut rates one to two times this year, aligning with the Fed's communication [2] - The Fed's policy statement is expected to remain unchanged, with any news potentially emerging from the statement of economic projections [3] - The Fed is expected to maintain its current stance, awaiting further data to clarify inflation expectations [7] Economic Uncertainty & Geopolitical Factors - There's increased uncertainty due to the Middle East situation, reciprocal tariffs, and unclear US-China relations [4][5] - Geopolitics is playing a bigger role in inflation expectations [6] - The Fed's tools are limited in addressing changes in trade policy, the political environment, and geopolitical factors [6] US Dollar & Treasury Market - The dollar has shown weakness, with a temporary rebound as a flight to safety [8] - Foreign buyers have reduced their holdings of US Treasuries, decreasing from 50% to 30% over the past decade [8] - Dollar depreciation is anticipated to continue marginally, with treasury market volatility expected, especially in the long end [13] Investor Sentiment & Market Dynamics - Investors, including sophisticated institutional investors, are questioning their geographic allocation to US assets [10] - The depth and liquidity of US markets, including treasuries, the dollar, and private assets, remain robust [11] - There is still no alternative to the US dollar [12] - A transition is occurring that matters for flows and valuations, but it is marginal from a geopolitical perspective at the moment [12]