The Fox News Rundown Business Rundown: U.S. and China Agree to 'Framework' on a Trade Deal
Oct 27, 2025
Ryan Payne, President of Payne Capital Management and investment manager, shares insights on critical market trends. He discusses the optimistic outlook for investors with the recent U.S.-China trade framework, which reduces tariff uncertainty. The anticipated 25-basis-point cut by the Federal Reserve is also analyzed, alongside factors affecting the labor market and inflation. Payne warns of potential bubble risks in asset markets while highlighting the impact of AI spending. Overall, the conversation revolves around navigating a complex economic landscape with emerging opportunities.
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Fed Has Shifted Away From 2% Target
- The Fed appears to have moved past a strict 2% inflation target and accepts a higher inflation regime.
- Ryan Payne says rate cuts stimulate small-cap earnings because those firms borrow short-term and are highly rate-sensitive.
Structural Labor Shortage Persists
- The labor market is tight due to retirements and lower immigration, creating a structural worker shortage.
- Payne argues AI reduces some hiring now, but rising profits will eventually force firms to hire again.
Position For Two Rate Cuts
- Expect about two Fed rate cuts as the most likely path and position portfolios accordingly.
- Watch money market flows: lower yields will push cash into equities and risk assets, increasing bubble risk.