$PAXG 📊 Fed’s 25 bps Rate Cut This Week Viewed as a ‘Low-Risk’ Strategy

Financial analysts widely believe that the Federal Reserve’s expected 25 basis point rate cut this week will serve as a measured, low-risk policy adjustment — similar to the move Chair Jerome Powell described last month as a “risk management” step to support the slowing U.S. economy.

According to Neil Dutta, Head of Economics at Renaissance Macro, the U.S. labor market continues to soften gradually, providing a strong foundation for expectations that inflation will keep easing.

“The job market is clearly weakening, and that gives the Fed room to act,” Dutta said. “We’re seeing more large companies accelerating layoffs — the employment environment is tightening.”

💡 Core Inflation Near Target

Dutta also noted that when tariff effects are stripped out, core inflation is already approaching the Fed’s 2% target — reinforcing the case for continued, cautious but necessary rate cuts.

The latest data indicates that inflationary pressures are fading while wage growth and hiring momentum are slowing, creating conditions where additional easing can stabilize growth without reigniting inflation.

🔍 Market Implications

Markets have already priced in a near-100% probability of a 25 bps cut this week, as tracked by the CME FedWatch Tool.

Investors view the decision as part of a broader “soft landing” strategy — balancing inflation control with the need to sustain employment and output amid growing global uncertainty.

If confirmed, this move would mark the second consecutive rate cut in 2025, signaling that the Fed is prioritizing economic resilience over inflation fears.

#FED #GOLDNEWS