BREAKING: The Fed Is About to Cut Rates by 50bps

8 snips

Aug 7, 2025

Big changes are brewing as the Federal Reserve signals a potential 50 basis point rate cut due to concerning labor market data. Insights from Fed officials hint at the need for shifting inflation assumptions amid economic turmoil. The relationship between interest rates and the treasury market is explored, along with its impacts on gold prices. Recent economic indicators suggest we might be entering a cycle mirroring last year’s, raising expectations for imminent monetary policy shifts.

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INSIGHT

Fed Set for 50bps Cut

The Federal Reserve is poised to cut rates by 50 basis points in September due to economic weakness.
Market signals and Fed officials' statements strongly align on the likelihood and size of this cut.

INSIGHT

Labor Weakness Trumps Tariff Inflation

Fed officials like Mary Daly cite mounting evidence of labor market weakness, worsening compared to last year.
There is no evidence tariff-driven inflation is spreading, suggesting the Fed must act before being too late.

INSIGHT

Fed Officials Signal More Cuts

Multiple Fed officials are publicly acknowledging underestimated economic weakness.
They signal readiness to cut rates multiple times if labor market softness persists without inflation spillovers.

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Everything continues to point directly toward much lower rates, including what is setting up to be a repeat of last summer. As Steve and I said a few days ago in the wake of the unambiguously bad jobs report, watch the market and the Fed speakers this week. It's been only two days and they're doing just what we thought they would, putting the FOMC back on the road swaps paved for a fifty in September.

Eurodollar University's Money & Macro Analysis

Reuters Exclusive: Fed's Daly says time is nearing for rate cuts, may need more than two
https://www.reuters.com/business/feds-daly-says-time-is-nearing-rate-cuts-may-need-more-than-two-2025-08-04/

Dow Jones Kashkari leans toward rate cut as concerns about an economic slowdown grow at the Fed
https://www.morningstar.com/news/marketwatch/20250806162/kashkari-leans-toward-rate-cut-as-concerns-about-an-economic-slowdown-grow-at-the-fed

Bloomberg Fed’s Kashkari Says Rate Cut May Be Appropriate in Near Term
https://www.bloomberg.com/news/articles/2025-08-06/fed-s-kashkari-says-rate-cut-may-be-appropriate-in-near-term

Bloomberg Bets on Fed Rate Cuts Are Sweeping Through US Bond Market
https://www.bloomberg.com/news/articles/2025-08-05/bets-on-fed-rate-cuts-are-sweeping-through-the-us-bond-market

Bloomberg Trump Says He Will Decide on Fed Governor Before End of the Week
https://www.bloomberg.com/news/articles/2025-08-05/trump-says-he-will-decide-on-fed-governor-before-end-of-the-week

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