RenMac RenMac Off-Script: Lack of Conviction
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Sep 19, 2025 The discussion kicks off with the Fed's recent risk-management cut and the internal divisions affecting future interest rate decisions. Insights into the current state of housing and construction reveal potential implications for job growth. The team analyzes the rally in small caps and cyclicals, questioning if momentum can sustain. Additionally, they explore the impact of tariff politics and regulatory changes, adding complexity to the market outlook. It's a deep dive into how these factors intertwine, shaping both economic and trading landscapes.
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Fed Cut Was Risk-Managed Consensus
- The Fed's 25bp cut was framed as risk-management to build consensus and avoid a divisive 50bp split.
- The FOMC shows wide dispersion and low conviction about policy beyond the next couple meetings.
Personalities Shaped The Decision
- Internal Fed dynamics mattered: some who previously dissented for cuts didn't push for larger moves this time.
- That behavior suggests political and personality influences shaped the final policy choice.
Housing Momentum Is Rolling Over
- Housing is weakening across construction, sales, and renovations with starts below completions.
- Declining permits point to further construction job losses as builders defend margins by slowing sales and production.