Bloomberg Surveillance September Rate Cut Prospects
10 snips
Sep 8, 2025 
In this discussion, Steve Englander, Global Head of G10 FX Research at Standard Chartered, provides insights on the weakening dollar and shares his bold prediction of a 50bps rate cut in September. He explores the interplay between U.S. labor data revisions and market expectations. The conversation also touches on geopolitical uncertainties, particularly regarding a potential government shutdown, and the economic implications of rising government spending. Englander emphasizes how these dynamics could influence financial markets and economic forecasts.
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Why A 50bps September Cut Is Plausible
- Steve Englander argues the Fed will likely cut 50bps in September because recent data are softer than the Fed expected.
- He expects a single decisive cut followed by a pause to assess incoming GDP and productivity signals.
Productivity And Labor Drive Fed Uncertainty
- Englander emphasises major uncertainty from productivity and labour shocks versus demand shocks the Fed usually studies.
- That ambiguity argues for cautious, incremental policy moves rather than aggressive multi-step tightening or easing.
Move Slowly And Reassess Policy Steps
- Englander recommends the Fed take slow, observable steps: move, observe, and adjust rather than committing to a long sequence of cuts.
- He advises pausing between moves to see whether data confirm the initial direction.