Bloomberg Surveillance Instant Reaction: Jay Powell on the Fed Decision
11 snips
Sep 17, 2025 Jeff Rosenberg, a BlackRock portfolio manager and strategist, dives into the implications of the Fed's recent interest rate cut. He highlights how a weakening labor market prompted this decision, shifting focus to bond pricing dynamics. Rosenberg elaborates on the disconnect between labor-driven market shifts and long-term bond prices, emphasizing how upcoming FOMC appointments will influence policy expectations. The conversation features insights into the current economic landscape and the Fed's dual mandate amidst increasing pressure for rate reductions.
AI Snips
Chapters
Transcript
Episode notes
Risk-Management Cut Amid Committee Split
- The Fed cut rates 25 basis points as a risk-management move citing labor market weakness over inflation risks.
- The committee shows wide dispersion on future policy, making forward guidance ineffective.
Insurance Cut Driven By Employment Risks
- Bill Dudley called the move an "insurance" cut driven by rising downside risks to employment versus inflation.
- He warned the decision doesn't meaningfully change guidance because outcomes depend on incoming data.
Monetary Policy Hits Different Households
- Dudley highlighted distributional impacts: low-income households face higher squeeze from tariffs and weaker labor markets.
- He stressed monetary policy is blunt and can't tailor outcomes to all groups.