The Federal Reserve cut interest rates for the second time in 2025 last week, though one member of the central bank's monetary policy committee voted against cutting rates, citing concerns over inflation. Policymakers on the Federal Open Market Committee (FOMC), which guides the Fed's monetary policy, voted 10-2 in favor of lowering the benchmark federal funds rate by 25 basis points to a target range of 3.75% to 4%. One dissenter, Fed Governor Stephen Miran, called for a larger 50-basis-point cut.The other ...

Japan economic perspective Global Markets Research EQUITY: JAPAN STRATEGY BOJ October 2025 MPM and Japanese equity macro perspective Initial momentum in spring negotiations is key focus now We view October MPM outcome as dovish postponement of rate hike The Bank of Japan (BOJ) decided to leave its policy rate unchanged at its Monetary Policy Meeting (MPM) held over 29–30 October (see our 30 October 2025 report BOJ Watch ). This decision was in line with what both we and the markets had expected. However, we ...

Core Viewpoint - The Federal Reserve's current operational flaws necessitate a significant overhaul and new leadership, as highlighted by Jerome Powell's recent press conference following the central bank's policymaking meeting [1]. Group 1: Interest Rate Decisions - The Fed's decision to cut interest rates by 0.25% was anticipated, but Powell's indication that another cut next month is uncertain surprised many, citing economic uncertainty exacerbated by a government shutdown [2]. - Powell emphasized the mixed signals in the economy, with strong consumer spending but unstable labor markets, likening the situation to "driving in the fog" [2]. Group 2: Economic Understanding - The Fed's belief that prosperity leads to inflation is fundamentally flawed, as it creates a bias against a robust economy, which distorts market signals and hinders proper economic functioning [3]. - The central bank's attempts to suppress prices disrupt the natural supply and demand dynamics essential for a healthy economy [3]. Group 3: Monetary Policy and Dollar Stability - The Fed's primary responsibility should be to maintain a stable dollar, which is currently weak, yet Powell did not address this issue during his remarks [4]. - The Fed's balance sheet has ballooned to 21% of GDP, significantly higher than the pre-2008 level of 6%, indicating an excessive accumulation of securities [5]. Group 4: Balance Sheet Management - Powell announced that the Fed will cease reducing its balance sheet size without providing a credible rationale, suggesting that the institution values its power over sound monetary policy [6]. - The Fed's holdings of $6.6 trillion in securities grant it substantial influence over the financial marketplace, affecting credit availability across sectors [6]. Group 5: Foreign Reserves and Inflation Target - Approximately 40% of the reserves on which the Fed pays interest are from foreign banks, implying that American taxpayers are subsidizing these institutions [7]. - The 2% inflation target set by the Fed lacks a solid foundation, as it appears to have been arbitrarily determined [7].

(Reuters) -The U.S. Federal Reserve's top bank cop, Michelle Bowman, announced plans to reorganize the agency's supervision and regulation division and shrink the unit's staff by roughly 30%, Bloomberg News reported on Thursday. The reduction will be through attrition, retirements and voluntary separation incentives, Bowman said during a Thursday event, the report added, citing people familiar with the matter. "She expects S&R to have a smaller overall footprint of roughly 350 employees – a reduction of ...

The reductions would leave the Fed's supervision and regulation division with about 350 people ...

The Federal Reserve cut its key interest rate Wednesday for a second time this year as it seeks to shore up economic growth and hiring, even as inflation stays elevated. ...

Core Points - The US central bank has cut interest rates for the second time this year, reducing the rate by a quarter of a percentage point to a range of 3.75%-4% [1] - The Federal Reserve's decision to cut rates comes despite the government shutdown, which has frozen non-essential government functions and delayed the release of key economic data [2] - Inflation data showed a 3% increase in September, which is one percentage point above the Fed's 2% target, but lower than economists' expectations, allowing for the rate cut [3] Group 1: Interest Rate Cut - The Federal Reserve has implemented a second interest rate cut this year, responding to pressures from President Trump [1] - The current interest rate is set in a range, differing from the single percentage approach used in the UK [1] Group 2: Economic Data and Assessment - The government shutdown has resulted in the absence of crucial employment figures, complicating the Fed's ability to assess economic conditions [2] - The Fed's dual mandate includes maintaining maximum employment and steady inflation, which is challenged by the lack of data [2] Group 3: Inflation Concerns - Inflation reached 3% in September, exceeding the Fed's target but not as high as anticipated, easing concerns over inflation driven by trade policies [3] - The Fed's decision to cut rates is influenced by the absence of significant inflationary pressures despite ongoing trade tensions [3] Group 4: Political Pressure - President Trump has expressed dissatisfaction with the Fed and its chair, Jerome Powell, even threatening to remove him over rate decisions [5][6] - The political climate surrounding the Fed's independence has been strained due to Trump's actions and comments regarding rate-setting officials [5][6] Group 5: Market Reactions - The anticipation of an interest rate cut has positively impacted US and European stock markets, leading to record highs in major stock indexes [8]

Core Points - The Federal Reserve has cut interest rates by a quarter point for the second consecutive meeting, lowering the rates to a range of 3.75% to 4%, marking the first time since 2022 that rates have dipped below 4% [1][5] - Policymakers are divided on the decision, with some advocating for caution due to potential inflation impacts from tariffs, while others believe that inflation effects will be temporary and support aggressive rate cuts to stimulate labor market growth [2] - Stephen Miran, the newest Fed governor, voted against the quarter-point cut, advocating instead for a half-point reduction, while Jeffrey Schmid opposed the decision, preferring rates to remain unchanged due to inflation concerns [3][9] Economic Context - The decision to cut rates was influenced by economic reports, including a Consumer Price Index (CPI) increase to 3% in September, which was slightly lower than expected, facilitating the rate cut [6] - The ongoing government shutdown has affected data collection and analysis by agencies like the Bureau of Labor Statistics, raising concerns about the availability of future economic reports, including the October inflation report [7]

Core Viewpoint - The Federal Reserve has approved its second consecutive interest rate cut, lowering the benchmark overnight borrowing rate to a range of 3.75%-4%, despite limited visibility on the economy due to a government shutdown [2][3] Interest Rate Decision - The Federal Open Market Committee (FOMC) voted 10-2 to implement the rate cut, with dissenting opinions regarding the pace of the cut [2][3] - The decision to end quantitative tightening (QT) will take effect on December 1, 2025, marking a shift in the Fed's monetary policy approach [2][7] Economic Indicators - The Fed acknowledged uncertainty in economic conditions due to the suspension of key data collection, including nonfarm payrolls and retail sales [4] - Available indicators suggest moderate economic expansion, with job gains slowing and the unemployment rate remaining low [5][6] - Inflation remains elevated at an annual rate of 3%, influenced by higher energy costs and tariffs [6] Labor Market Concerns - The Fed expressed concerns over rising downside risks to employment, noting a flattening pace of hiring despite contained layoffs [6][7] - The balance between full employment and stable prices is becoming increasingly challenging for policymakers [7] Balance Sheet Management - The Fed's balance sheet, which expanded from over $4 trillion to nearly $9 trillion during the Covid crisis, will not return to pre-pandemic levels [10] - The end of QT has resulted in a reduction of approximately $2.3 trillion from the Fed's portfolio of Treasurys and mortgage-backed securities [8][10] Market Reactions - Markets had anticipated the end of QT either in October or by year-end, with major averages experiencing volatility but reaching record highs, particularly in Big Tech stocks [11][12] - Historical trends indicate that markets tend to rise following Fed rate cuts, although this could lead to higher inflation risks [12]

The Federal Reserve lowered interest rates at its second consecutive meeting on Wednesday, extending an effort to prevent a recent slowdown in hiring from turning into something more serious. ...