{"id":96819,"date":"2025-10-22T11:02:07","date_gmt":"2025-10-22T11:02:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/96819\/"},"modified":"2025-10-22T11:02:07","modified_gmt":"2025-10-22T11:02:07","slug":"financial-conditions-rate-cuts-and-the-fomc","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/96819\/","title":{"rendered":"Financial conditions, rate cuts and the FOMC"},"content":{"rendered":"<p>The Federal Open Market Committee is likely to reduce its policy rate by 25 basis points to a range between 3.75% and 4% at its next meeting on Oct. 29.<\/p>\n<p>That policy step is not without risks.<\/p>\n<p>First, the FOMC is cutting rates directly into financial markets that look frothy at best and setting up for a correction at worst.<\/p>\n<p>Our RSM US Financial Conditions Index implies that conditions are mildly accommodative in contrast with a modestly restrictive stance that Federal Reserve Chairman Jerome Powell uses to describe current policy conditions.<\/p>\n<p><a href=\"https:\/\/realeconomy.wpenginepowered.com\/wp-content\/uploads\/2025\/10\/10_22_2025_MM.jpg\" target=\"_blank\" rel=\"noopener nofollow\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-27296 size-mailchimp-images\" src=\"https:\/\/realeconomy.wpenginepowered.com\/wp-content\/uploads\/2025\/10\/10_22_2025_MM-560x339.jpg\" alt=\"\" width=\"560\" height=\"339\"  \/><\/a><\/p>\n<p>Our index indicates that financial conditions in the United States stand at 0.65 standard deviations above neutral, which is not well aligned with recent central bank rhetoric.<\/p>\n<p>Any cuts by the central bank point toward the risk of lower rates, greater liquidity and more leverage stoking a greater financial bubble.<\/p>\n<p>Second, we think that inflation, driven by sticky and stubborn service sector demand, is likely to remain above 3% and will most likely increase as tariffs reset higher.<\/p>\n<p>We anticipate that inflation, in both the headline and core September consumer price index, will arrive at 3.1% when it is published on Friday.<\/p>\n<p>Get Joe Brusuelas\u2019s Market Minute economic commentary every morning.<a href=\"https:\/\/realeconomy.rsmus.com\/subscribe-to-market-minute\/\" rel=\"nofollow noopener\" target=\"_blank\"> Subscribe now<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"The Federal Open Market Committee is likely to reduce its policy rate by 25 basis points to a&hellip;\n","protected":false},"author":2,"featured_media":96820,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[72,61,60,123],"class_list":["post-96819","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-business","tag-ie","tag-ireland","tag-markets"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/96819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=96819"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/96819\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/96820"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=96819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=96819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=96819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}