Bloomberg Daybreak: Europe Edition Daybreak Weekend: Fed Decision, Trump UK Visit, BOJ Policy
Sep 12, 2025
Mia Glass, Japan FX and rates reporter based in Tokyo, joins Ellen Milligan, Bloomberg's political correspondent, to delve into several pressing topics. They tackle the impending Federal Reserve interest rate decision and its market implications, along with FedEx's earnings amid changing consumer trends. The conversation shifts to the geopolitical landscape surrounding Trump's UK visit, discussing potential trade negotiations and public sentiment. Finally, they examine the upcoming Bank of Japan meeting amidst political upheaval and struggles with inflation.
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Fed Likely To Cut Small, Wait On Path
- The Fed is likely to cut 25 basis points but won't risk 50 because labor weakening and sticky inflation conflict.
- Policymakers may 'punt' on explicit guidance for October and December to watch incoming data.
Services, Not Goods, Driving Inflation
- August CPI showed services inflation driving the surprise, not goods, with airline fares and lodging up sharply.
- Service-driven inflation complicates the Fed's response because tariffs don't explain those price moves.
Labor Data Need Cautious Interpretation
- Jobless claims spiked to near four-year highs, but seasonal distortions around Labor Day require caution.
- The Fed will watch whether the weakening labor data persists before altering its guidance.