Rate Expectations: A Somber Week Ahead of the September FOMC Meeting

In this week's episode, we break down the factors and trends shaping the economy, including new reports that shed some light on labor and inflation. Expected rate cuts from the Federal Reserve at next week’s Federal Open Market Committee Meeting (FOMC) appear to be the main driving force behind movements in fixed income and equities. Please join us on Thursday, September 18, where we’ll sit down with experts in Artificial Intelligence during our National Call: AI: Everything You Are Afraid to Ask but Need to Know. And be sure to tune in again next week, where we’ll recap the news from this highly-anticipated FOMC meeting, and anything else impacting the markets. Speakers:Brian Pietrangelo, Managing Director of Investment StrategyRajeev Sharma, Head of Fixed IncomeStephen Hoedt, Head of Equities02:16 – We consider a softening labor market as evidenced by an increase in weekly initial unemployment claims and the semi-annual update from the Bureau of Labor Statistics detailing a correction of over 900,000 fewer jobs in the 12-month period ending in March 2025 than was initially reported.03:42 – The Producer Price Index (PPI) data showed a slight decline, while the Consumer Price Index (CPI) report indicated higher-than-expected month-over-month and year-over-year inflation, driven mainly by food and shelter costs.04:48 – The Fed seems poised to resume interest rate cuts with next week’s FOMC meeting, as fears of making a policy error dissipate as rising (but not accelerating) inflation and a cooling jobs market create an opportunistic environment for rate cutting.06:40 – Treasuries show demand and momentum ahead of the FOMC meeting, with the 2-Year Treasury yield hitting 3.55% and the 10-Year around 4.06%.11:04 – Equities buck the historical norm of taking a downturn this time of year, buoyed by expectations of rate cuts and record investments in tentpole industries like Artificial Intelligence in an apparently non-recessionary climate.14:08 – A brief look into what’s happening with resilient crude oil prices and early stimulation in the housing market.16:11 – We revisit our predictions for 2025 that were made late last year, and gauge how accurate they have been thus far. Additional Resources9/18 Webinar: Key Wealth's National Call - AI: Everything You Are Afraid to Ask but Need to KnowKey Questions | Key Private BankSubscribe to our Key Wealth Insights newsletterWeekly Investment BriefFollow us on LinkedIn