{"id":13351,"date":"2025-09-13T07:04:15","date_gmt":"2025-09-13T07:04:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/13351\/"},"modified":"2025-09-13T07:04:15","modified_gmt":"2025-09-13T07:04:15","slug":"jobless-and-inflation-data-is-keeping-wall-street-confident-powell-will-cut","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/13351\/","title":{"rendered":"Jobless and inflation data is keeping Wall Street confident Powell will cut"},"content":{"rendered":"

If markets needed further evidence for a September rate cut<\/a>, they got it: Initial jobless claims for the first week of September came back as the highest in nearly four years.<\/p>\n

The Labor Department revealed Thursday that initial claims rose by 27,000 to\u00a0263,000\u00a0in the week ended Sept. 6\u2014their highest level since October 2021.<\/p>\n

Many saw the data (compounded by significant revisions to recent jobs reporting from the Bureau of Labor Statistics, which painted a far weaker employment picture than previously believed) as further pressure on the Federal Open Market Committee (FOMC) to cut the base rate.<\/p>\n

That\u2019s because part of the Fed\u2019s mandate is to ensure stable and maximum employment, an aspect of its work that in recent months has been overshadowed by the fear of inflation\u2014mainly owing to President Trump\u2019s tariff plans.<\/p>\n

On this account, Fed Chair Jerome Powell has agreed with many analysts that he will have to \u201csee through\u201d tariff increases as a one-off blip to price stability as opposed to an ongoing trend which will need to be managed.<\/p>\n

This meant yesterday\u2019s consumer price index<\/a> (CPI) didn\u2019t come with the same level of gravity as it may have done otherwise. The BLS reported CPI for urban consumers increased 0.4% on a seasonally adjusted basis, up 0.2% from July.<\/p>\n

The largest contributor to the increase was shelter, which rose 0.4%, while the food index increased 0.5%, with groceries increasing 0.6% for the month.<\/p>\n

But markets shook off the warmer data: The S&P 500 is up 0.85% at the time of writing, the Dow<\/a> Jones is up 1.36%, and the Russell 2000 is up 1.83%. Despite political volatility in France, Paris\u2019s CAC was only down a marginal 0.45%, while London\u2019s FTSE 100 is up around 0.35%.<\/p>\n

In Asia Japan\u2019s Nikkei 225 was up approximately 0.9%, while India\u2019s Nifty 50 increased by 0.46%.<\/p>\n

Markets are \u201cbuoyant,\u201d wrote Deutsche Bank\u2019s Jim Reid to clients this morning: \u201cThe combined data prompted a rally in U.S. Treasuries, with 10yr yields falling \u20136bps lower after the print before closing \u20132.5bp on the day to 4.02% \u2026 However,\u00a0the front-end rally ran out of steam as the day went on and 2yr yields closed a mere \u20130.1bps lower as markets remained hesitant to price in much risk of a 50bps cut, with September Fed pricing unchanged at 27bps.\u201d<\/p>\n

Action for investors<\/p>\n

With CME\u2019s FedWatch barometer<\/a> still pricing in a 0.0% chance of a rate hold at the FOMC\u2019s meeting this month, J.P. Morgan Wealth Management\u2019s\u00a0Elyse Ausenbaugh, head of investment strategy, said the team had been \u201cencouraging investors to dust off their \u2018rate-cutting playbook.\u2019\u201d<\/p>\n

Ausenbaugh wrote in a note seen by Fortune: \u201cThe path for the Fed to deliver what\u00a0the market is expecting looks clear from our perspective. With inflation printing in-line with expectations and the labor market not giving us signs of improvement, a cut is in order.\u201d<\/p>\n

She added: \u201cWe expect these cuts to happen without a recession. There\u2019s potential in the evolving environment for continued equity outperformance in the U.S. and abroad. It\u2019s also important for investors to consider the\u00a0reinvestment\u00a0risk associated with holding cash and ultra-short-term fixed income positions.\u201d<\/p>\n

Over at UBS Global Wealth Management, chief investment officer\u00a0Mark Haefele is similarly reminding clients of their to-do list during a base rate cut. He wrote this morning: \u201cWith cash returns set to fall further as the Fed resumes rate cuts, we see a growing need to deploy excess cash into higher-yielding assets.<\/p>\n

\u201cPhasing into diversified portfolios over time could also help manage the risk of poor timing, reduce the influence of emotion, and provide more opportunities to benefit from market dips and rebounds.\u201d <\/p>\n

Here\u2019s a snapshot of the markets globally this morning:<\/p>\n

S&P 500 futures\u00a0were down 0.22% this morning.\u00a0<\/p>\n

STOXX Europe 600\u00a0was down 0.18% in early trading.\u00a0<\/p>\n

The U.K.\u2019s FTSE 100\u00a0was up 0.35% in early trading.<\/p>\n

Japan\u2019s Nikkei 225\u00a0was up 0.89%.<\/p>\n

China\u2019s CSI 300\u00a0was down 0.57%.\u00a0<\/p>\n

South Korea\u2019s KOSPI\u00a0was up 1.54%.<\/p>\n

India\u2019s Nifty 50\u00a0was up 0.46%.<\/p>\n

Bitcoin\u00a0has nudged above $115K.Fortune Global Forum returns Oct. 26\u201327, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"If markets needed further evidence for a September rate cut, they got it: Initial jobless claims for the…\n","protected":false},"author":2,"featured_media":13352,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,2116,13753,1972,4318,85,932,46],"class_list":{"0":"post-13351","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-employment","11":"tag-fed-interest-rate","12":"tag-fed-interest-rates","13":"tag-federal-reserve","14":"tag-il","15":"tag-inflation","16":"tag-israel"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/13351","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=13351"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/13351\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/13352"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=13351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=13351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=13351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}