The Fed clearly signals an orientation towards a relaxation of its monetary policy

This orientation is also reinforced by the dissent of two Fed governors against the decision. Furthermore, a first since 1993, in favor of a drop in rates. Meanwhile,

The Fed clearly signals an orientation towards a softening of its monetary policy by highlighting the rising risks weighing on growth. In addition, the labor market, while affirming that, according to its basic scenario, the inflationary impact of customs tariffs will be temporary. In addition, This orientation is also reinforced by the dissent of two Fed governors against the decision. a first since 1993, in favor of a drop in rates.

However. we argued that market expectations would be difficult to meet – and they were actually disappointed by the lack of engagement in favor of a drop in September, which also questioned the five rate reductions that had been anticipated by the fed clearly signals orientation towards end of 2026. Powell was clear that the customs tariffs will increase inflation – the Fed had already integrated an increase from 0.3 to 0.3 to 0.3 to 0.3 to 0.3 percentage of underlying inflation in its evaluation.

Regarding the labor market. one of the main justifications for the accommodating orientation of the Fed is its vision that the demand for labor is weakening in connection with the drop in labor supply due to immigration. We believe that this creates a risk of surprise “Hawkish” (more restrictive) if the growth of jobs does not. slow down enough to correspond to the decline in the growth of the active population in the United States. This is a point that we will observe closely in the American employment data published this Friday.