This content was published on <\/p>\n
September 11, 2025 – 20:18\n<\/p>\n
(Bloomberg) \u2014 A relatively tame inflation reading combined with more signs of jobs cooling spurred a rally on Wall Street amid speculation the Federal Reserve will slash interest rates for the first time this year.<\/p>\n
The highly anticipated consumer price index showed that while inflation is still above the Fed\u2019s 2% target, it\u2019s not spinning out of control. Alongside that report came the usually noisy jobless claims figures, which jumped to the highest in almost four years, emboldening bets policymakers will cut rates next week in an effort to counter a rapid slowdown in the labor market.<\/p>\n
Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms.<\/p>\n
That was enough to spur a rally in Treasuries, with the 10-year yield briefly breaching 4%. And that\u2019s even as European bonds underperformed on bets the euro-zone easing cycle is over. In a broad advance, the S&P 500 hit a fresh record. The Dow Jones Industrial Average topped 46,000. Small caps jumped. Gold eclipsed its inflation-adjusted peak set in 1980.<\/p>\n
\u201cIt\u2019s clear that inflation is relatively calm, which gives the Fed the flexibility to focus more on stemming ongoing weakness in the labor market,\u201d said Skyler Weinand at Regan Capital. \u201cWe expect the Fed to cut 25 basis points next week and to follow through with another two 25 basis-point cuts this year.\u201d<\/p>\n
A slowing jobs market has prompted markets to price a more aggressive trajectory of rate cuts, with a growing number of economists now seeing a quarter-point rate cut at each of this year\u2019s three remaining meetings. Fed Chair Jerome Powell cautiously opened the door to a cut at the Fed\u2019s Jackson Hole symposium last month, and more recent data showed the hiring slowdown extended into August.<\/p>\n
\u201cRight now, inflation is a key subplot, but the labor market is still the main story,\u201d said Ellen Zentner at Morgan Stanley Wealth Management. \u201cToday\u2019s CPI may appear to offset yesterday\u2019s PPI, but it wasn\u2019t hot enough to distract the Fed from the softening jobs picture. That translates into a rate cut next week \u2014 and, likely, more to come.\u201d<\/p>\n
\u201cThe claims data were arguably the bigger news,\u201d said Tiffany Wilding at Pacific Investment Management Co. \u201cWe still expect the Fed to cut 25 bps next week, though 50 will likely be discussed. We continue to look for 75 bps of total cuts this year.\u201d<\/p>\n
For the first time in a long time, CPI is being overshadowed on its release day by initial jobless claims, noted Josh Jamner at ClearBridge Investments.<\/p>\n
This dynamic illustrates the Fed\u2019s focus on the \u201cmaximum employment\u201d half of the Fed\u2019s dual mandate, with today\u2019s inflation print not hot enough to derail a 25 basis-point rate cut next week, he said.<\/p>\n
\u201cToday\u2019s CPI report has been trumped by the jobless claims report,\u201d said Seema Shah at Principal Asset Management. \u201cIf anything, the jump in jobless claims will inject a bit more urgency in the Fed\u2019s decision making, with Powell likely signaling a sequence of rate cuts is on the way.\u201d<\/p>\n
While there may be some murmurs within the Fed and particularly among Fed Chair contenders about the need for a 50 basis-point cut, an emergency-sized reduction is not required, Shah noted. Jobless claims have jumped but are still quite low compared to 2021 levels, while the broader economic activity data and earnings reports do not signal the US is approaching a recessionary tipping point.<\/p>\n
\u201cThe weaker the labor market gets, the less inflation matters,\u201d said David Russell at TradeStation. \u201cIt\u2019s a balancing act, and the scales are tipping more toward full employment versus price stability. That\u2019s especially true after this week\u2019s big downward revisions of the annual employment and last week\u2019s poor non-farm payrolls report.\u201d<\/p>\n
While Fed officials are widely expected to cut interest rates next week after a series of weak employment data, firm inflation \u2014 if sustained \u2014 may complicate the path for additional reductions at subsequent meetings.<\/p>\n
To Chris Zaccarelli at Northlight Asset Management, it\u2019s surprising to see how quickly the narrative has shifted. Whereas before last week\u2019s jobs report the question was whether or not there would be a cut in September, now traders are speculating how many cuts we will see following the first reduction.<\/p>\n
\u201cThe Fed\u2019s path is clear in the short run, but over the medium term, the fact that core inflation is running quite a bit higher on a month-over-month basis is going to complicate matters,\u201d he said.<\/p>\n
The core consumer price index, excluding the often volatile food and energy categories, increased 0.3% from July. When incorporating those components, the overall CPI rose 0.4%, the most since the start of the year. Meantime initial jobless claims rose by 27,000 to 263,000 in the week ended Sept. 6, the highest since October 2021.<\/p>\n
\u201cThe labor market is cracking; however, the inflation data are a reminder that a large upfront move is unlikely,\u201d said Neil Dutta at Renaissance Macro Research. \u201cThe Fed is only likely to deliver a 25bp move. That is what I think the Fed will do, not what I think they should do.\u201d<\/p>\n
At Bankrate, Stephen Kates says concerns over \u201cstagflation\u201d are likely to intensify as the Fed weighs its next move.<\/p>\n
\u201cThe Fed\u2019s dual mandate of stable prices and full employment remains firmly at odds, limiting their policy flexibility in 2025. Even if the committee decides to cut rates, it will likely reflect a surrender to economic weakness rather than a clear win over inflation,\u201d he noted.<\/p>\n
\u201cUpside surprises on both US inflation and firings have stagflationary undertones,\u201d said Don Rissmiller at Strategas. \u201cBut neither trend looks entrenched yet here.\u201d<\/p>\n
To John Kerschner at Janus Henderson Investors, the Fed has now clearly painted itself into a corner.<\/p>\n
\u201cChair Powell is vowing to fight the ever obvious slowdown in the labor market with rate cuts, while at the same time ignoring the other half of its dual mandate \u2013 stable prices, or more specifically, 2% inflation,\u201d Kerschner said. \u201cWe do not believe that the 2% target will be reached for at least several more years barring a recession, which, while always possible with external shocks, is not even close to our baseline forecast.\u201d<\/p>\n
For now, policymakers appear to be more concerned about the near-term impact of not easing, signaling that the risk to the labor economy \u2013 and overall economic momentum \u2013 presents the greater near-term risk, according to Jim Baird at Plante Moran Financial Advisors.<\/p>\n
\u201cIt\u2019s that perception that is expected to drive the Fed to trim its policy rate next week. The bigger question is \u2018what next?\u2019 Jay Powell\u2019s press conference and the release of updated FOMC projections should go a long way toward providing an answer,\u201d he said.<\/p>\n
Bond investors are also interested in whether a decision to cut rates next week is unanimous. In July, two Fed governors \u2014 Christopher Waller and Michelle Bowman \u2014 dissented the decision to keep rates unchanged in favor of lowering them, and Waller has since has since said he favors \u201cmultiple cuts\u201d in the coming months.<\/p>\n
While Thursday\u2019s economic data had little impact on market-implied expectations for next week\u2019s Fed decision, traders priced in a steeper downward path for the federal funds rate in subsequent months.<\/p>\n
To Krishna Guha at Evercore, the lastest inflation data support a Fed outlook for three successive cuts in September, October and December to recalibrate rates in a timely manner back down to roughly spot neutral by the end of the year. That should also help some Fed officials who have been on the fence to signal this in their submission for the September Summary of Economic Projections.<\/p>\n
\u201cOverall, we think the inflation trajectory is still moderately higher for a time, but the intermediate-term trend in inflation is generally moderating, especially in key areas such as services and shelter,\u201d said Rick Rieder at BlackRock. \u201cWe believe that the Federal Reserve\u2019s forward focus (maybe for the next few years) is likely to be achieving maximum employment \u2013 even if the economy does well in aggregate.\u201d<\/p>\n
\u2018Not an Aggressive Pivot\u2019<\/p>\n
Rieder says his preference is still owning duration in the front-to-belly of the yield curve, as correlations and fixed income\u2019s hedge effectiveness have improved at the margins here. While the back end of the curve has been less reliable, and at times more erratic, at this point some exposure to the longer end makes sense as rates decline, he added.<\/p>\n
\u201cThe Fed may still cut, but this data argues for a gradual path, not an aggressive pivot,\u201d said Gina Bolvin at Bolvin Wealth Management Group. \u201cFor investors, it\u2019s about staying focused on long-term fundamentals, not short-term noise. The AI optimism may continue to drown out the inflation noise and equity investors will continue to be rewarded long term.\u201d<\/p>\n
Veteran market strategist Ed Yardeni raised his year-end forecast for the S&P 500 to 6,800 from a previous target of 6,600 as his base case, while assigning a 25% probability that the US stock benchmark could experience a \u201cmeltup\u201d to 7,000 by 2025\u2019s close.<\/p>\n
\u201cIf the Fed lowers the federal funds rate on September 17 and signals more rate cuts ahead, we will increase our odds of a meltup and decrease our odds of a correction,\u201d he wrote in a note to clients.<\/p>\n
Corporate Highlights:<\/p>\n
Paramount Skydance Corp., the Hollywood studio taken over in August by independent filmmaker David Ellison, is preparing a bid for rival Warner Bros. Discovery Inc., according to a person with knowledge of the matter. Investors who have watched shares in Adobe Inc. get left behind in the AI craze have little reason for optimism ahead of the software maker\u2019s latest quarterly results. The Trump administration and Nvidia Corp. \u201csettled on 15%\u201d commission on the company\u2019s H20 chip sales to China, Commerce Secretary Howard Lutnick told CNBC. Micron Technology Inc. climbed as analysts touted the chipmaker\u2019s growth potential in the data center market, where artificial-intelligence services have stoked demand. The Federal Trade Commission ordered Alphabet Inc.\u2019s Google, OpenAI Inc., Meta Platforms Inc. and four other makers of artificial intelligence chatbots to turn over information about the impacts of their technologies on kids. Delta Air Lines Inc. is expanding its premium offerings and plans to provide a record number of more expensive seats next year as filling economy class particularly on domestic routes continues to be challenging. Kroger Co. raised its full-year sales forecast on food spending that\u2019s remained stable even as consumers seek out bargains. United Parcel Service Inc. shares have been pummeled, losing more than a third of their value this year, amid an upheaval in global trade. Bank of America Corp. says it\u2019s time to sell. Federal National Mortgage Association and Federal Home Loan Mortgage Corp. received their first buy recommendation from Wall Street on Thursday, as Deutsche Bank said the stocks\u2019 dizzying rally can go further on expectations the mortgage giants will possibly be released from government control in the near future. Citigroup Inc.\u2019s chief executive officer said merger activity is rebounding as US companies gain confidence from clearer policy signals, with a recession in the world\u2019s largest economy looking unlikely. Bank of New York Mellon Corp. said it\u2019s teamed up with Carnegie Mellon University to advance research into AI, including the use of the technology in applications that power financial services. Centene Corp. jumped as the insurer gave upbeat views of its Medicare quality ratings and costs in its Medicaid business, positive signs for the company\u2019s turnaround. Figure Figure Technology Solutions Inc. soared in its trading debut raising $787.5 million in an IPO. The blockchain-based credit company joins a cohort of crypto firms in embracing public markets. Opendoor Technologies Inc. shares surged after announcing the return of its co-founders to the board and a new chief executive officer. Oxford Industries Inc., the owner of the Tommy Bahama apparel brand, maintained its annual earnings outlook, despite anticipating a higher tariff hit. In addition, analysts were encouraged by quarter-to-date comparable sales commentary. LB Pharmaceuticals Inc. jumped in their trading debut after the biotech raised $285 million in an upsized initial public offering. Indian software services giant Infosys Ltd. will buy back as much as 180 billion Indian rupees ($2 billion) worth of shares in an effort to return cash to investors amid a stock-price decline. Iberdrola SA agreed to buy an additional 30% stake in Brazilian power distributor Neoenergia SA for about 12 billion reais ($2.2 billion) as it looks to increase investments in electricity networks. Novo Nordisk A\/S\u2019s new chief executive officer is calling workers back to the office as the Ozempic maker struggles to catch up with Eli Lilly & Co. in the hyper-competitive obesity market. Discovery Ltd.\u2019s annual profit rose 30% to a record, paced by a jump in its South African health-insurance businesses and its Vitality franchise that benefitted from folding the global wellness program into a single business. Some of the main moves in markets:<\/p>\n
Stocks<\/p>\n
The S&P 500 rose 0.8% as of 2:13 p.m. New York time The Nasdaq 100 rose 0.6% The Dow Jones Industrial Average rose 1.4% The MSCI World Index rose 0.7% Bloomberg Magnificent 7 Total Return Index rose 1.2% The Russell 2000 Index rose 1.7% Currencies<\/p>\n
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.3% to $1.1734 The British pound rose 0.3% to $1.3575 The Japanese yen rose 0.1% to 147.26 per dollar Cryptocurrencies<\/p>\n
Bitcoin rose 0.7% to $114,459.14 Ether rose 2.3% to $4,429.66 Bonds<\/p>\n
The yield on 10-year Treasuries declined three basis points to 4.01% Germany\u2019s 10-year yield was little changed at 2.66% Britain\u2019s 10-year yield declined three basis points to 4.61% The yield on 2-year Treasuries declined one basis point to 3.53% The yield on 30-year Treasuries declined four basis points to 4.65% Commodities<\/p>\n
West Texas Intermediate crude fell 2.2% to $62.29 a barrel Spot gold fell 0.2% to $3,634.76 an ounce \u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"This content was published on September 11, 2025 – 20:18 (Bloomberg) \u2014 A relatively tame inflation reading combined…\n","protected":false},"author":2,"featured_media":4932,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[1577,114,6144,11069,85,46,5268,6145],"class_list":["post-10134","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-bonds","tag-business","tag-business-general","tag-currency-values","tag-il","tag-israel","tag-stocks","tag-ticker"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/10134","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=10134"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/10134\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/4932"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=10134"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=10134"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=10134"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}