UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'The Fed and the future'
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Sep 15, 2025 Investors are keenly observing the upcoming Federal Reserve meeting, anticipating not just a rate cut, but insights into future economic concerns. Recent jobless claims indicate a weakening labor market, though some layoffs may be temporary. Additionally, the influence of foreign investment could impact the strength of the dollar, while political uncertainties loom over trade policies, affecting US businesses' operations in Europe.
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Fed Focus Is Forward Guidance
- The Fed meeting matters more for forward guidance than the expected rate cut this week.
- Fed Chair Jerome Powell watches weak data closely because unemployment fears can curtail consumer spending.
Temporary Layoffs Versus Permanent Job Loss
- Initial jobless claims rising could signal labour-market weakening, but context matters.
- Temporary layoffs (e.g., parts shortages) are less likely to trigger lasting consumer fear.
GM Plant Parts Shortage Example
- General Motors temporarily laid off workers because of parts shortages at a plant.
- That example points to disrupted international supply chains causing short-term job interruptions.