Investors are telling the monetary policy decision of September 17 of the Federal Reserve; The markets expect a cut -off fees cut that could trigger short -term volatility but potentially feed long -term profits in risk assets.
The economic backdrop highlights the delicate Fed Balancing Law.
According to the latest IPC report published by the US Labor Statistics Office. UU. On Thursday, consumer prices increased 0.4% in August, raising the annual RSE of the CPI to 2.9% of 2.7% in July, since shelter, food and gasoline raised the highest costs. Core CPI also rose 0.3%, extending its constant rhythm of recent months.
Producer prices told a similar story: according to the latest PPI report published on Wednesday, the main PPI index fell 0.1% in August, but remained 2.6% higher than a previous year, while Core PPI advanced 2.8%, the largest annual increase since March. Together, reports underline the stubborn inflationary pressure even when growth slows down.
The labor market has softened even more.
Non -agricultural payrolls increased by only 22,000 in August, with losses of jobs of the federal government and the energy sector that compensate for modest profits in medical care. Unemployment remained at 4.3%, while the participation of the workforce remained stuck at 62.3%.
The reviews showed that the June and July employment growth was weaker than was initially reported, reinforcing the signs of cooling impulse. The average hourly profits still increased 3.7% year after year, keeping salary pressures alive.
Bond markets have been adjusted accordingly. According to Marketwatch data, 2 -year treasure performance is 3.56%, while 10 years are 4.07%, leaving the curve modestly inverted. Future operators see a 93% probability of a 25 basic points, according to CME Fedwatch.
If the Fed limits its transfer to only 25 bps, investors can react with a response to “buy the rumor, sell the news”, since the markets already have a price in relief.
The actions are testing registration levels.
The S&P 500 closed on Friday at 6,584 after the 1.6% increase for the week, it is better since the beginning of August. The one -month table of the index shows a strong rebound from its backward backwardness, underlining the upward feeling that is directed to the Fed Week.
The Nasdaq compound also obtained five straight records, which ended at 22,141, driven by earnings in Megacap Tech shares, while the Dow fell below 46,000 but still reserved a weekly advance.
Cryptography and products have recovered next door.
Bitcoin is quoted at $ 115,234, below its historical maximum of August 14 about $ 124,000, but still firmly higher in 2025, with the global Crypto market capitalization now $ 4.14 billion.
Gold has increased to $ 3,643 per ounce, near maximum records, with its one -month table showing a constant upward trajectory as investors have a price of investors in lower real yields and look for inflation hedges.
The historical precedent supports cautious optimism.
Kobeissi’s letter analysis, informed in an X thread published on Saturday, citing Carson’s investigation, shows that in 20 of 20 previous cases since 1980, where the FED reduced rates within 2% of the historical maximums S&P 500, the index was higher a year later, averaging earnings of almost 14%.
The shortest term is less predictable: in 11 of those 22 instances, the shares fell in the month after cutting. Kobeissi argues that this time could follow a similar pattern: initial turbulence followed by longer -term profits as the relief of the rate amplifies the impulse behind assets such as actions, bitcoin and gold.
The broader configuration explains why merchants are closely seeing the announcement of September 17.
The reduction of rates, while inflation obtains higher and shares are loom in the records, the records run the credibility of the abolration, however, remaining on hold could scare markets that already have a price in flexibility. In any case, the Fed message about growth, inflation and its policy perspective will probably shape the trajectory of markets in the coming months.
