Summary
A post-FOMC market analysis piece summarizing the Fed’s September 2025 rate cut and the market implications of its dot-plot projections. The piece contextualizes the political dynamics — Trump appointee Miran’s push for aggressive cuts, the Lisa Cook court battle — alongside global central bank rate trajectories and forward market pricing for 2025–2026.
Key Points
- CME FedWatch at time of publication: 87.5% probability of 50 bps total additional cuts by year-end (October + December)
- FOMC median dot plot: two additional cuts in 2025, bringing the rate to 3.5%–3.75%
- Miran, as Trump appointee, dissented for a half-point cut and had a dot suggesting 1.25 points additional cuts by year-end — the most aggressive projection
- Unemployment at 4.3% (August) — highest since October 2021 — is the key data point driving the dovish pivot
- Global context: Bloomberg Economics forecast 15 of 23 major central banks would cut in 2025; Bank of Canada citing trade damage from US tariffs
- Morningstar forecast: more aggressive than Fed dot plot, seeing 3.0%–3.25% range by 2026
- Core inflation expected to ease to 2.6% by 2026, per Fed projections
Newsletter Angles
- Miran as a Trojan horse: his dissent normalizes the idea that even a minority FOMC member can publicly advocate for aggressive cuts — creating market expectations and pressure on the chair even without changing the vote outcome
- The global central bank synchronization story: the US cut is cascading (Bank of Canada, India following), but the ECB is pausing for inflation control. This divergence matters for currency dynamics.
- The “terminal rate” question: at 3.5%–3.75%, the Fed is projecting a “neutral” landing, but Morningstar and aggressive market pricing suggests markets don’t believe the Fed will stop there
Entities Mentioned
- Federal Reserve — institution analyzed
- Jerome Powell — chair maintaining independence framing
- Donald Trump — pressure campaign context
- 2025 United States Government Shutdown — not mentioned directly but occurred in the same week as publication
Concepts Mentioned
- Fed Independence — Miran’s dissent and political dynamics
- Stagflation — dual mandate tension between labor and inflation risks
- Trade War Currency Dynamics — global rate synchronization driven by US tariff policy
Notes
Ainvest is a market data/newsletter publication — not a tier-1 journalism outlet. Content is substantively accurate but reads as market analysis rather than reporting. Use as a data aggregation source rather than primary journalism. The global central bank data (Bloomberg Economics) is the most distinctive contribution of this piece.