MacroUpdate

The Federal Reserve looks ready to cut interest rates once again at its upcoming October 29 FOMC meeting — potentially bringing the Federal Funds rate down to 3.75%–4%. This would mark another major step toward a more dovish policy stance as the Fed tries to support a cooling economy without reigniting inflation.

Market Context:
Bond markets have already priced in this move, and the Fed’s latest projections suggest more cuts could follow through 2025. Recent labor data shows signs of softening, while inflation remains above target but stable — a mix that gives the Fed room to act.

🗣️ Inside the Fed:

Christopher Waller sees room for further cuts, emphasizing a data-driven approach.

Stephen Miran, one of the newest voices, is pushing for even deeper easing — possibly toward a 2% policy rate.

Michelle Bowman warns that waiting too long could risk the job market, especially after downward revisions to payroll numbers.

⚖️ Powell’s Balancing Act:
Fed Chair Jerome Powell remains cautious, walking the fine line between cutting too much and tightening too long. He continues to stress the Fed’s dual mandate — maintaining price stability while protecting employment.

🚧 Shutdown Shadow:
The government shutdown has delayed key data like the September jobs report, forcing policymakers to rely on private estimates and internal models — adding more uncertainty to an already tricky decision.

Market Takeaway:
A rate cut on October 29 is almost guaranteed, but what comes after remains uncertain. Investors are bracing for volatility as data trickles in — any unexpected shift could ripple through equities, bonds, and even crypto markets.

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