2025-09-17 20:26

Fed cuts policy rate by a quarter of a percentage point Policymaker projections show two more cuts for remainder of 2025 Miran dissented in favor of a half-percentage-point cut Labor market risks were main focus of policy decision WASHINGTON, Sept 17 (Reuters) - The Federal Reserve, goaded by the risk of rising unemployment, reduced interest rates on Wednesday for the first time since December and indicated more cuts would follow to halt any slide in a labor market already experiencing higher joblessness among Blacks, a declining workweek, and other signs of weakness. The decision moves in a direction called for by President Donald Trump, but falls far short of the steep cuts in borrowing costs that he has demanded - and which were apparently penciled into projections submitted by new Fed Governor Stephen Miran, who cast the only dissenting vote. Sign up here. Fed Chair Jerome Powell, speaking in a press conference after the U.S. central bank lowered its benchmark interest rate by a quarter of a percentage point to the 4.00%-4.25% range , opens new tab and indicated more cuts would follow at meetings in October and December, said the softening job market was now top of the mind for him and his fellow policymakers. "There are no risk-free paths ... It's not incredibly obvious what to do," Powell told reporters at the end of a two-day policy meeting. "We have to keep our eye on inflation at the same time, we cannot ignore ... maximum employment." Powell said he believes the recent pace of job creation is running below the break-even rate needed to hold the unemployment rate constant, and that with businesses doing very little hiring overall, any increase in layoffs could quickly feed into higher unemployment. "You see minority unemployment going up. You see younger people ... more susceptible to economic cycles ... in addition to just overall lower payroll job creation that shows you that at the margin, the labor market is weakening. ... We don't need it to soften anymore," he said. Powell's comments cap a steady shift in tone that began over the summer as Fed officials concluded that the higher import tariffs imposed by the Trump administration would not lead to persistent inflation, with faster price increases expected through the end of the year but price pressures also expected to fade after that time even as monetary policy becomes looser. At the same time, signs of job market weakness began to accumulate, with payroll growth nearing stall speed. MEETING MARKED BY POLITICAL DRAMA The decision to cut rates came with no shortage of political drama, with Trump trying to fire Governor Lisa Cook in a so-far unsuccessful effort to open another seat on the Fed's Board of Governors for him to fill, and appointing Miran, who is on leave from his job as head of the White House's Council of Economic Advisers, to an open position that may only last until the end of January. Miran was sworn in on Tuesday before the meeting started, and dissented against the policy decision in favor of a larger half-percentage-point rate cut. He also seems to have submitted a year-end rate projection implying he supports further half-percentage-point cuts in the meetings ahead, with the policy rate dropping below 3%. The interest rate "dots" are not associated with policymakers by name, but new projections showed one forecast far below the others that analysts promptly attributed to Miran. Concerns that Trump's interference with the Fed - through constant criticism over its rate policy, the appointment of a White House insider to the Fed board and the president's effort to fire Cook - would yield signs of outsized political influence appear to have been overblown for now. Two other Trump appointees to the central bank's board - Fed Vice Chair of Supervision Michelle Bowman and Governor Christopher Waller - joined the wider consensus after dissenting just one meeting earlier. Waller in particular has been arguing for greater focus on the job market since the summer, a concern that others on the Fed's policy-setting committee have come to share as data indicated weaker hiring and which is now reflected in the policy statement. "It's deeply in our culture to do our work based on the incoming data and never consider anything else," Powell said in response to questions about the Fed's ability to maintain its independence in setting interest rates. "There wasn't widespread support at all for a 50-basis-point cut today." 'WEIGHTING THE LABOR MARKET MORE' Even with inflation expected to end the year at 3%, well above the central bank's official 2% target, Fed policymakers "deemed that the downside risk to employment has increased, and therefore it would seem that they are weighting the labor market more than the higher inflation that they noted in their projections," said Ellen Hazen, chief market strategist at F.L. Putnam Investment Management. Powell said it was not so much the initial cut that will matter to the economy, but the broader sense of a rate path that moves slightly faster to a stopping point about a quarter of a percentage point lower than officials communicated in their projections in June. The rate-path views are not commitments, Powell said, with higher inflation still a risk and the central bank now in a "meeting-by-meeting situation" when it comes to further rate reductions. But "I do think the Fed will ultimately keep moving towards neutral," even at the expense of slightly higher inflation through 2026, said Christopher Hodge, chief U.S. economist at Natixis. New economic projections released by the Fed showed policymakers at the median still see inflation ending this year at 3%, well above the central bank's 2% target, a projection unchanged from the forecasts in June. The projection for unemployment was also unchanged at 4.5% and the one for economic growth slightly higher at 1.6% versus 1.4%. Stocks briefly rose after the release of the policy decision and projections before turning lower and closing mixed, while the dollar was modestly higher against a basket of major trading partners' currencies. Treasury yields were little changed and rate futures markets saw more than a 90% probability of another rate cut at the Fed's next meeting in late October. Among those voting in favor of the policy decision was Cook, who attended the meeting despite Trump's effort to fire her and after two courts supported her challenge of his attempted dismissal. https://www.reuters.com/business/fed-lowers-interest-rates-signals-more-cuts-ahead-miran-dissents-2025-09-17/

2025-09-17 20:20

Republicans conflicted between loyalty to constituents or Trump Farmers worried about low crop prices and trade wars Near-record $40 billion in farm payments expected in 2025, USDA data shows WASHINGTON, Sept 17 (Reuters) - As U.S. farmers enter autumn harvest season worried that low crop prices and a trade war could hurt their livelihoods, Republican farm-state lawmakers are urging President Donald Trump's administration to issue economic aid for farmers by year's end. Discussions between lawmakers and the administration highlight the trade-offs Republicans face between loyalty to the president and representing constituents who have contacted their offices and flocked to town halls in their districts, worried about the impact of Trump's trade policies. Sign up here. Four farm-state members of Congress told Reuters they are in talks with the U.S. Department of Agriculture and other administration officials about an aid package, ideally by the end of December. Republican Senator John Hoeven, who leads agriculture funding on the appropriations committee, said he is discussing with the administration an approach similar to that taken during Trump's first term, when the federal government issued $23 billion in payments to farmers to offset losses from a trade war with China. He said emergency aid could also be added to a government spending bill. Hoeven, of North Dakota, said farmers need assistance "the sooner, the better, but certainly by year-end." On Monday, Agriculture Secretary Brooke Rollins said she is working daily with Congress , opens new tab to evaluate how much aid might be needed this autumn, but did not specify a timeline or amount. A USDA spokesperson said officials were "exploring the need for further assistance but have not made a determination if an additional program is needed at this time." The spokesperson said Trump was supporting farmers by opening new international markets, lowering taxes and boosting farm supports in his tax-cut and spending bill. “President Trump and Secretary Rollins are always in touch with the needs of our farmers, who played a crucial role in the President’s November victory," White House spokesperson Anna Kelly said in an email. The email added that Trump's inflation fight will "lower input costs" while trade deals "are opening new markets for America’s agriculture industry. We would not get ahead of the President on any support for pending legislation.” FARMS TO GET NEAR-RECORD PAYMENTS The federal government is already expected to spend more than $40 billion on payments to farmers in 2025, the second-highest amount since 1933, according to USDA data. The near-record sum is fueled by ad-hoc disaster and economic aid passed by Congress last December. “Farmers are going through some of the worst economic times, I think, in my lifetime,” said Republican House Agriculture Committee Chairman Glenn Thompson, of Pennsylvania, adding the need for aid has grown and he hopes to pass some assistance in a farm-spending package later this year. Congress is several years overdue to pass a farm bill. The lawmakers were hesitant to specify how much aid was needed, but said it eclipsed the $23 billion of Trump's first term. Net farm income could fall by more than $30 billion in 2026 due to a decline in government payments and low crop prices, according to an estimate from the Food and Agricultural Policy Research Institute at the University of Missouri. Representative Angie Craig, the top Democrat on the Agriculture Committee, blamed Trump’s tariffs and economic policies for this downturn. "We’ve lost markets farmers worked decades to develop and the president is continuing his trade wars," the Minnesota lawmaker said. "The administration needs to step up and end the chaos in farm country.” In northeast Arkansas early this month, almost 500 farmers and farm industry insiders packed a church center to warn the staff of their state's all-Republican congressional delegation they may not be able to pay off farm loans that many used to purchase seed for spring planting. “Farming is done like Russian roulette. You have to pay out the loan to go again next year,” said Scott Brown, who attended the Arkansas town hall to advocate for his four-crop, 800-acre (324 ha) farm. Republican Representative Rick Crawford, whose Jonesboro, Arkansas-area district hosted the town hall, said an aid package would likely not arrive before October. That is when Congress is expected to replenish a discretionary USDA funding pool, the Commodity Credit Corporation, that would likely be the source of payments. Lawmakers are currently locked into a partisan standoff to avert a potential government shutdown before funding runs out at the end of the fiscal year on September 30. “I think farmers can probably wait till October. But I think what they need, and what the bankers need, as much as anything, is a strong signal that the money will be there,” Crawford said, “And if it's not, we're going to see a lot of financial calamity in rural America.” https://www.reuters.com/world/us/us-farmers-face-financial-calamity-without-extra-aid-soon-republican-lawmakers-2025-09-17/

2025-09-17 20:19

Fed delivers normal-sized rate cut, sees steady pace of further reductions Dollar supported after Powell says Fed is in a 'meeting-by-meeting situation' with respect to future policy path Canadian dollar weakens as BoC cuts rates NEW YORK, Sept 17 (Reuters) - The U.S. dollar fell to a fresh four-year low against the euro before reversing losses to trade higher on the day in a choppy session after the Federal Reserve cut interest rates by a quarter of a percentage point. The rate cut, along with projections showing two more quarter-percentage-point reductions are anticipated at the remaining two policy meetings this year, indicates Fed officials have begun to downplay the risk that the administration's trade policies will stoke persistent inflation. Sign up here. "The Fed opted for the most probable outcome this afternoon, cutting 25 basis points. Risk assets and treasuries appear to be focused on the Fed's expectation for two more cuts this year," Blair Shwedo, head of investment grade sales and trading at US Bank, said. Fed officials have gradually warmed to the idea that Trump's tariffs would have only a temporary impact on inflation, and the latest forecasts are consistent with that view. The cut, the first move by the policy-setting Federal Open Market Committee since December, lowered the policy rate to the 4.00%-4.25% range. A 25 basis point cut was widely expected though U.S. President Donald Trump , opens new tab on Monday called for a "bigger" cut to benchmark interest rates. The dollar found some support after Fed Chair Jerome Powell said the Fed is in a "meeting-by-meeting situation" regarding the outlook for interest rates and characterized Wednesday's move as a risk management cut, adding that he does not feel the need to move quickly on rates. The move to a more consistent pace of cuts was backed by Fed Governor Christopher Waller and Vice Chair of Supervision Michelle Bowman, Trump appointees who dissented over the policy decision in late July to hold rates steady. The euro was 0.3% lower against the dollar at $1.18305, after rising to as high as $1.19185, its strongest since June 2021, earlier in the session. The dollar index , which measures the U.S. currency against six others, was 0.3% higher at 96.926. Earlier in the day data showed U.S. single-family homebuilding and permits for future construction dropped in August amid a glut of unsold new houses and a softening labor market, shrugging off falling mortgage rates. With the Fed finally cutting rates again, many market participants see further losses for the dollar, but that is far from a given, analysts said. "In part, why I'm thinking that the U.S. dollar may not necessarily completely sink is also the idea that you have to take into account what's going on outside of the U.S. and the global growth narrative," said Juan Perez, director of trading at Monex USA in Washington. "The global growth narrative is not a good one. It's not like everybody else is killing it out there," he said. On Wednesday, the Canadian dollar weakened about 0.2% against its U.S. counterpart after the Bank of Canada reduced its key policy rate by 25 bps to a three-year low of 2.5%, as expected, citing a weak jobs market and less concern about underlying pressures on inflation. Sterling was up 0.08% on the day at $1.36575, not far from 2-1/2-month highs after British inflation data matched expectations. Against the Japanese yen , the dollar rose 0.1% to 146.655 yen, ahead of a Bank of Japan policy meeting on Friday, where the central bank is expected to stand pat on rates. The spotlight is on an October 4 vote where the ruling Liberal Democratic Party will elect a new leader to replace outgoing Prime Minister Shigeru Ishiba. Cryptocurrency bitcoin was down 1% at $115,730. https://www.reuters.com/world/middle-east/dollar-whipsawed-fed-delivers-normal-sized-rate-cut-2025-09-17/

2025-09-17 19:56

WASHINGTON, Sept 17 (Reuters) - More than 100 Democratic lawmakers in the U.S. House of Representatives on Wednesday urged the Trump administration to abandon plans to repeal vehicle emission rules. In a letter seen by Reuters, 102 lawmakers led by Representative Doris Matsui called on the Environmental Protection Agency to drop its aim to repeal all greenhouse gas emission standards for light-duty, medium-duty and heavy-duty vehicles and engines. Sign up here. "Repealing the vehicle pollution standards would hamstring this growing industry, killing thousands of good-paying American jobs and ceding the future of global automotive leadership to China," the lawmakers wrote in a letter seen by Reuters. In July, the EPA said it will rescind the long-standing finding that greenhouse gas emissions endanger human health, removing the legal foundation for all U.S. greenhouse gas regulations, a move that would end current limits on greenhouse gas pollution from vehicle tailpipes, power plants, smokestacks and other sources. The EPA said it will review the letter and respond through the appropriate channels. Comments on its proposal are due by September 22. "If we turn our backs on clean vehicle technologies, the next generation of American vehicles will be significantly more expensive to fuel, maintain, and repair," according to the letter, which was also signed by Representatives Rick Larsen, Alexandria Ocasio-Cortez, Raja Krishnamoorthi and Jerrold Nadler. The letter said EPA’s analysis "suggests the proposal to eliminate vehicle pollution standards would result in $1.3 trillion in lost fuel and maintenance savings." The Trump administration has taken aim at vehicle environmental rules on a number of fronts. In June, Trump signed a resolution of disapproval under the Congressional Review Act to bar California's landmark plan to end the sale of gasoline-only vehicles by 2035 and two other vehicle rules. In June, NHTSA paved the way for looser U.S. fuel economy standards by declaring that former President Joe Biden's administration exceeded its authority by assuming high uptake of electric vehicles in calculating rules. Trump also signed legislation eliminating penalties for automakers not meeting U.S. fuel economy standards dating back to 2022. https://www.reuters.com/sustainability/climate-energy/democratic-lawmakers-urge-trump-drop-plan-kill-vehicle-emission-limits-2025-09-17/

2025-09-17 19:55

NEW YORK, Sept 17 (Reuters) - The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday and indicated it will steadily lower borrowing costs for the rest of this year, as policymakers responded to concerns about weakness in the job market in a move that won support from most of President Donald Trump's central bank appointees. Only new Governor Stephen Miran, who joined the Fed on Tuesday and is on leave as the head of the White House's Council of Economic Advisers, dissented in favor of a half-percentage-point cut. Sign up here. In a press conference, Fed Chair Jerome Powell indicated that Wednesday's move to lower interest rates was a risk management cut, adding that he doesn't feel the need to move quickly on rates. MARKET REACTION: STOCKS: Wall Street shares were mixed after the Fed cut rates: the Dow, while the S&P 500 and the Nasdaq fell. BONDS: U.S. Treasury 10-year yields rose to 4.074%. FOREX: The dollar index advanced 0.4% to 96.962. COMMENTS: MICHAEL ROSEN, CHIEF INVESTMENT OFFICER, ANGELES INVESTMENTS, SANTA MONICA, CALIFORNIA: "Powell tempered some of the initial enthusiasm in the markets for a more aggressive path of monetary easing. He noted the softness in the labor market, but reserves a larger cut for more serious conditions that are not present today. The Fed also raised its inflation forecast, highlighting the delicate balance between setting monetary policy to offset a weaker labor market versus bringing inflation lower." "None of this changes our thinking on how to position portfolios. The economy is experiencing a mild bout of stagflation: marginally slower growth due partly to restrictive trade and immigration policies, and sticky inflation around 3%. This is far from the stagflation of the 1970s, but at the margin argues for a more conservative outlook for returns on stocks and bonds." "We believe that diversifying portfolios across geographies and currencies and sectors, following a decade of unprecedented outperformance of U.S. dollar assets, is appropriate for investors." JACK MCINTYRE, PORTFOLIO MANAGER, BRANDYWINE GLOBAL INVESTMENT MANAGEMENT, PHILADELPHIA: "In addition to the political jabs aimed at them, the Fed is in a tough spot. They expect stagflation, or higher inflation and a weaker labor market. That is not a great environment for financial assets. One could call the Fed's move a risk management-style rate cut. It shows the Fed is putting more emphasis on the softening in the labor market as they trimmed rates while forecasting more cuts in 2025." "It makes sense that more rate cuts are expected as monetary policy works with a lag and labor market statistics are a lagging economic indicator. The weakening labor market will have a deleterious impact on inflation, so the Fed is willing to wait out sticky inflation. There was a significant dispersion in policy views by this Fed for 2026, which probably means more volatility in financial markets next year. Now, we are all back to data dependency, starting with tomorrow’s initial jobless claims." MICHAEL GAPEN, CHIEF U.S. ECONOMIST, MORGAN STANLEY, NEW YORK: "The Fed cut by 25 basis points as expected, and signaled more cuts are forthcoming. The Fed views downside risk to employment as having risen, justifying a 25 basis point cut today and 75 basis points in cuts by year end. The updated forecasts signal that inflation is likely to run further above 2.0% and for longer: PCE inflation was revised higher to 2.6% in 2026 from 2.4%. On net, a dovish signal." BLAIR SHWEDO, HEAD OF INVESTMENT GRADE SALES AND TRADING, US BANK, CHARLOTTE, NORTH CAROLINA: "The Fed opted for the most probable outcome this afternoon, cutting 25 basis points. Risk assets and treasuries appear to be focused on the Fed's expectation for two more cuts this year." "The decision coming out of this meeting should be a boon for risk assets overall and we should see credit spreads remain at historical tights." "In addition to the positive risk backdrop, the fall in rates should present a welcoming environment for issuers and encourage additional primary market activity for corporate bonds." MARK MALEK, CHIEF INVESTMENT OFFICER, SIEBERT FINANCIAL, NEW YORK: "This is in line with what we were expecting and were positioned for. We know that it's a live situation, though, and we're going to have to come up with a narrative around the extent of the dissent. The market's reaction so far has been to sell on this news, which isn't that surprising; what does surprise me is that the markets were as bullish going into this as they were. I'm expecting more of a negative knee-jerk reaction, because there was a lot of excitement and a bit too much exuberance came in too soon. I don’t know if we should be celebrating; if this kind of cut is enough to justify new highs this week." BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN: "The Fed decision is as we expected: but by a quarter point while Miran dissents in favor of a bigger cut. In the Summary of Economic Projections, the biggest news was going from penciling in two cuts this year back in June to three cuts." "Because it’s September we get another year of projections, out to 2028. The Fed seems to think it get everything back to targets by 2027 and take 2028 as a year to coast." "Broad economic growth is stronger than expected, inflation is a bit tamer than feared, and the labor market is decelerating faster than hoped. All in, it's not a sign that they're in panic-mode, nor should they be. "Miran's dots stand out like a sore thumb, so those are going to be perceived more as signaling than any sort of indicator of where policy might actually head. Waller likely did agree with Miran about the path of rates through 2026, mostly differing in terms of how many cuts to have this year and next." "The big question now is whether Powell leans into the dovish interpretation the market has put on this or whether he pushes back against it." CHRISTOPHER HODGE, CHIEF US ECONOMIST, NATIXIS, NEW YORK: "Powell is going to need to justify why the dots show more cuts in 2026 with lower unemployment and higher inflation than projected in June. The dots are an awkward amalgam of predictions that are not easily explained, but still, the dovish dot plot seems in conflict with the projected inflationary/labor dynamics. I do think the Fed will ultimately keep moving towards neutral, but that will help to keep inflation elevated throughout 2026." CHRIS GRISANTI, CHIEF MARKET STRATEGIST, MAI CAPITAL MANAGEMENT, NEW YORK: "I would say this is a mildly bullish report, as it shows that the Fed no longer has the hawkish bias it had earlier in the year. In the commentary, unemployment seems as much of a worry now as inflation." "The Fed lowered rates by 25 basis points – no surprise there – but the bigger news here is the huge dispersion in the 'dot plot' estimates as to where rates will be a year and two years from now. The wide dispersion in those viewpoints introduces more volatility around upcoming economic news, especially jobs and inflation reports." "Each data point will be scrutinized even more closely – if that's possible. I wouldn't be surprised by a 'sell on the news' afternoon, but basically, it's steady as she goes and we'll see what the future will bring." "We certainly won't be changing positioning here. The thrust is that the Fed is less certain than it was before, and we are already conservatively positioned, which I like." ROBERT TIPP, CHIEF INVESTMENT STRATEGIST AND HEAD OF GLOBAL BONDS AT PGIM FIXED INCOME, NEW JERSEY: "In summary, it's a positive number for the markets overall. It's a measured step towards easing. They're not showing a disregard for inflation, so it's a balanced step. But it is growth-supported and going to provide an anchor for the yield curve. So that should keep this slow-moving bull market going in bonds, and probably in credit as well." "The curve is steep, and I think particularly if the Fed is easing aggressively, it will continue to steepen in all likelihood. But I think what would surprise investors is that the performance of the back-end of the curve has been really pretty firm over the last week or so. The long run has really kicked in, and I think there's an element of positioning very heavy in steepeners, and that may take the yield curve dynamics away from the typical trident of where yield curve steepening continues unabated until you're almost into the hiking cycle. This time that may be truncated in terms of time." GEORGE BORY, CHIEF INVESTMENT STRATEGIST FOR FIXED INCOME, ALLSPRING GLOBAL INVESTMENTS, CONNECTICUT: "Today, the FOMC validated Chair Powell’s more dovish stance by approving the 25-bp rate cut." "The yield curve's modest flattening over the past month suggests that bond investors’ concerns about future economic growth are beginning to outpace their uneasiness regarding persistent inflationary pressures. That said, the bond market’s enthusiasm for additional rate cuts may be growing too much, too fast. Federal funds futures are currently pricing in four to five rate cuts over the next 12 months, which may be overly aggressive given the underlying data. Our expectation is for a total of 100 bps in cuts over the next 12 months. "Looking forward, the FOMC could be inclined to ease policy further despite elevated inflation. However, the pace and size of future moves are unclear. Bond investors will likely remain focused on the health of the labor market for direction." CHRIS WARD, HEAD OF US SMALL BUSINESS BANKING, TD BANK, CHARLOTTE, NORTH CAROLINA: "Today's FOMC decision highlights the Fed's recognition of a moderating economy and the need to support continued economic growth." "This initial cut will provide relief to small businesses, who have been navigating macro-economic challenges and elevated borrowing costs." "This easing could not come at a better time as small business owners prepare for the busy holiday retail season." "With access to more affordable capital, small business owners should feel encouraged to move forward with long-delayed investments and address pressing needs such as hiring, technological upgrades and operational expansion." BRIJ KHURANA, FIXED INCOME PORTFOLIO MANAGER, WELLINGTON MANAGEMENT, BOSTON: "A big surprise was that there was only one dissent pushing for 50 bps of cuts by Stephen Miran. There had been speculation that both Governors Waller and Bowman would push for 50 bps during this meeting." "While the market is treating the additional 2 cuts in 2025 as dovish; overall, I think the messaging is hawkish. Waller (and) Bowman did not vote for 50 bps of cuts as the market had assumed, the 2026 dot did not decline to market expectations and the Fed is still acknowledging sticky inflation." ELLEN HAZEN, CHIEF MARKET STRATEGIST, F.L.PUTNAM INVESTMENT MANAGEMENT, WELLESLEY, MASSACHUSETTS: "The key element is that change to the statement where they added the phrase in the second paragraph that the committee is attentive to the risks of both sides of the dual mandate - that was there before - and judges that downside risks to employment have risen. So clearly, they're painting the picture that despite the fact that they actually increased their PCE and core PCE projections in the SEP for 2026 by 20 basis points... they have deemed that the downside risk to employment has increased, and therefore it would seem that they are weighting the labor market more than the higher inflation that they noted in their projections." "It reflects a couple of things - number one, the data is noisy, we don't know if the weaker labor market numbers that we've seen are going to prove to be enduring or if they will prove to be statistical anomalies. But at the same time, if the committee can repel the pressure against independence from the administration by appearing to be accommodating of the administration's wishes, then that may go some way toward the administration reducing the pressure." "So in other words, they are laying the groundwork for having a little bit easier policy and that does, whether this is intentional or not, I don't know, but it does send a message, 'Look, we hear you, you can stop harassing us because we hear you and we're concerned about the risk to the labor market. Therefore, we are lowering rates and we are going to lower rates again.' This is despite the fact that they have the unemployment rate lower next year." PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK: "The Fed lowered its rate by 25 basis points, in line with expectations, and there was only one dissent. So that sort of closed the gap from the previous meetings. The new sworn-in governor was obviously for a 50-basis-point rate cut." "I would say that it's pretty much a dovish statement. Yields that are moving a bit lower now and stocks are turning around to the upside." "The dot plot shows 75 basis points (total rate cuts in 2025), but that could change if the labor market continues to weaken. Inflation (expectations) moved up somewhat, but there aren't many changes here. The market likes it." "Like I said, it's a dovish statement. Now we'll just have to see what the what Fed Chief Powell has to say during his press conference." TIM GHRISKEY, SENIOR PORTFOLIO STRATEGIST, INGALLS & SNYDER, NEW YORK: "This is what the Fed has been holding in its back pocket, so it's not a big surprise. Its the first cut in the while, but it's not helping the market." "We've got a soft labor market, a bit of softness in housing. All that should be helped by lower rates." GUY LEBAS, CHIEF FIXED INCOME STRATEGIST, JANNEY CAPITAL MANAGEMENT, PHILADELPHIA: "This was about as close to expectations as humanly possible (and) basically what was baked into markets ahead of time." "There was an acknowledgment that the risk is now skewed toward lower employment." "On the lone dissenting vote from Miran: "I think it's ridiculous to have a strong opposition right after you get a job." "The Fed is heading in the direction of being politically captured...It's happened in the past and may be just a little more public this time around." "Given the level of growth and level of inflation…in 2026 and 2028 we can expect interest rates to be somewhat lower." "The probability that newly hired Fed members will ignore inflation risks is higher…All else equal that is likely going to steepen curve." https://www.reuters.com/business/view-fed-lowers-rates-by-quarter-point-powell-says-was-risk-management-cut-2025-09-17/

2025-09-17 19:26

Spot gold scaled record high of $3,707.40/oz Fed delivers normal-sized rate cut Deutsche Bank raises average gold price forecasts for next year to $4,000/oz Silver, platinum, palladium each down over 2% Sept 17 (Reuters) - Gold prices fell nearly 1% on Wednesday, retreating from a record high scaled earlier in the session, as market participants parsed remarks from Federal Reserve Chair Jerome Powell. Spot gold was down 0.9% at $3,658.25 per ounce, as of 3:11 pm EDT (1911 GMT), after hitting a record high of $3,707.40. Prices have risen nearly 6% so far this month. Sign up here. U.S. gold futures for December delivery settled 0.2% lower at $3,717.8. The Fed cut interest rates by a quarter of a percentage point and indicated it will steadily lower borrowing costs for the rest of the year. Meanwhile, Powell said the Fed is in a "meeting-by-meeting situation" regarding the outlook for interest rates. "The Fed is signalling uncertainty with Powell calling this a 'risk-management' cut which has triggered some quite understandable profit-taking," said Tai Wong, an independent metals trader. "A retracement or at least a consolidation is healthy; I don't expect an unusually deep pullback. Unless we get below major technical support at $3,550, the short-term uptrend should remain intact," he added. This marks the Fed's first rate cut of the year, following a pause in policy changes since December after lowering interest rates three times in 2024. Gold often gains appeal when interest rates fall, as lower yields reduce the opportunity cost of holding the non-yielding asset. Analysts say gold's record run this year has been underpinned by sustained central bank purchases, diversification away from the U.S. dollar, resilient safe-haven demand amid geopolitical and trade frictions, and broad dollar weakness. Bullion, considered a hedge against uncertainties, has surged 39% so far this year. Deutsche Bank raised its gold price forecast for next year to an average of $4,000 per ounce, up from $3,700. Spot silver slipped 2.4% to $41.51 per ounce, platinum dropped 2.2% at $1,360 and palladium fell 2.6% to $1,145.44. https://www.reuters.com/world/india/gold-falls-after-scaling-record-peak-markets-digest-fed-chair-powells-comments-2025-09-17/