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/

2025-09-17 19:25

Sept 17 (Reuters) - Federal Reserve Chairman Jerome Powell said Wednesday the U.S. central bank is undergoing a notable reduction in the ranks of those who work for the institution. The Fed leader, speaking in a press conference, said the central bank is currently in the process of shedding 10% of its staff and "at the end of that" Fed staffing will be where it was a decade ago. On the prospect of reforms of the Fed, Powell said "we're certainly open to constructive criticism and ways to do our jobs better," but he leaned against the need for a formal review of the central bank. Sign up here. https://www.reuters.com/business/feds-powell-said-central-bank-is-cutting-10-its-staff-2025-09-17/

2025-09-17 19:25

CAIRO, Sept 17 (Reuters) - Gulf central banks cut their key interest rates on Wednesday after the Federal Reserve cut U.S. interest rates by 25 basis points for the first time this year. The Fed cut its rate by a quarter of a percentage point, in a move that won support from most of President Donald Trump's central bank appointees. Sign up here. The Gulf's oil and gas exporters generally follow the Fed's lead on rate moves as most regional currencies are pegged to the U.S. dollar. Only the Kuwaiti dinar is pegged to a basket of currencies, which includes the U.S. dollar. While most regional economies have been largely shielded from stubbornly high inflation elsewhere, all have implemented ambitious economic diversification plans to boost non-oil growth and develop sectors such as real estate, tourism and manufacturing, which require billions in financing and investment. Saudi Arabia, the region's biggest economy, cut its repurchase agreement (repo) rate by 25 bps to 4.75% and its reverse repo rate also by 25 bps to 4.25%. The United Arab Emirates' central bank also reduced the base rate applied to its overnight deposit facility by 25 bps to 4.15%, from 4.40%, effective Thursday. "The immediate impact (of a Fed cut) would be lower borrowing costs across public and private sectors, easing pressure on governments, firms, and households and supporting broader fiscal stimulus and investment," said Hamza Dweik, Saxo Bank's head of trading for Middle East and North Africa. "A softer dollar, often associated with Fed easing, could support oil prices, benefiting GCC exporters. Nevertheless, energy-market volatility remains a key risk, given evolving global demand dynamics," Dweik said. Qatar's central bank reduced its deposit rate by 25 bps to 4.35%, its lending rate by 25 bps to 4.85% and its repo rate by 25 bps to 4.60%. Bahrain's central bank also cut its overnight deposit rate by 25 bps to 4.75% from 5%, effective Thursday. Kuwait cut its discount rate by 25 basis points to 3.75% from 4%. The Central Bank of Oman cut its repo rate by 25 basis points to 4.75%. A Reuters poll in July showed ramped-up oil production and diversification efforts will help most Gulf economies grow faster this year than they did in 2024. https://www.reuters.com/world/middle-east/gulf-central-banks-cut-key-interest-rates-following-fed-move-2025-09-17/

2025-09-17 19:22

BUENOS AIRES, Sept 17 (Reuters) - Argentina's economy expanded 6.3% in the second quarter compared to the same quarter in 2024, official data showed on Wednesday, marking three straight quarters of growth and coming just under economists' expectations. Analysts polled by Reuters had forecast a 6.5% expansion. Sign up here. Compared to the first quarter, GDP shrunk 0.1% in seasonally adjusted terms, Argentina's national statistics agency INDEC said in a report. The year-on-year increase was mainly due to booming investment, specifically gross fixed capital formation, which surged 32.1% compared to the same quarter last year. GDP was also boosted by strong performance in finance, tourism and construction, INDEC said. Economists have been watching how Latin America's third-largest economy consolidates its recovery from a recession it exited late last year. Some argue that despite recent growth the economy faces headwinds in domestic consumption and industrial output. Economists have also warned that high interest rates and structural challenges threaten long-term growth. The central bank's latest market expectations survey forecasts GDP to grow 4.4% in 2025. https://www.reuters.com/world/americas/argentinas-economy-expands-63-second-quarter-2025-09-17/

2025-09-17 19:10

Fed cut interest rates as expected US distillates stocks build stokes demand concerns Russian supply disruption risks persist NEW YORK, Sept 17 (Reuters) - Oil prices eased on Wednesday after data showing an increase in U.S. diesel stockpiles stoked worries about demand and the U.S. Federal Reserve cut interest rates as expected. Brent crude futures settled 52 cents, or 0.76%, lower to $68.22 a barrel while U.S. West Texas Intermediate crude futures lost 47 cents, or 0.73%, at $64.05. Sign up here. U.S. crude inventories fell sharply last week with a jump in exports and a sharp decline in imports, the Energy Information Administration said on Wednesday. But the rise in distillate stockpiles stoked demand concerns and kept a lid on prices, analysts said. "Looks like markets are responding on diesel, which is the soft underbelly of the entire complex," said Phil Flynn, a senior analyst at Price Futures Group. U.S. Federal Reserve on Wednesday cut interest rates by a quarter of a percentage point as expected and indicated it will steadily lower borrowing costs for the rest of this year, as policymakers responded to concerns about weakness in the . "This was not unexpected," said Phil Flynn, a senior analyst at Price Futures Group. "Right now the market is playing both sides in the middle." On the supply side, Kazakhstan resumed oil supplies through the Baku-Tbilisi-Ceyhan pipeline on September 13, state energy company Kazmunaygaz (KMGZ.KZ) , opens new tab said on Wednesday. Supplies were suspended last month because of contamination issues. In Nigeria, President Bola Tinubu on Wednesday lifted a six-month emergency rule in Rivers, a state located in the hub for Nigeria's crude exports. Russian oil supply risks were also in focus after Ukraine's attacks on Russia's energy infrastructure intensified in recent weeks. Russia's oil pipeline monopoly Transneft (TRNF_p.MM) , opens new tab warned producers they might have to cut output after Ukraine's drone attacks on critical export ports and refineries, three industry sources told Reuters on Tuesday. https://www.reuters.com/business/energy/oil-prices-ease-us-demand-concerns-2025-09-17/