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Trick or Treat? Fed Slashes Rates but Future Uncertainty Dampens Spirits
Manage episode 517599263 series 2815319
Cynthia Honcharenko, Director of Fixed Income Portfolio Management, joins the podcast to deliver a report on this week’s Federal Open Market Committee (FOMC) meeting; be sure to read her companion piece, “The Gentle Cut: Easing Without Euphoria” on our Weekly Investment Brief feed. Our discussion tracks how the equity and bond markets behaved leading up to, and following, the meeting, and what to expect going forward. We also touch on this week’s earnings reports from several big tech companies, and what positive trade talks between the United States and China might mean for the future.
Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
Cynthia Honcharenko, Director of Fixed Income Portfolio Management
Rajeev Sharma, Head of Fixed Income
Stephen Hoedt, Head of Equities
01:30 – Expected reports on initial unemployment claims, GDP, and inflation were not published this week due to the ongoing government shutdown, which is on track to be the longest in history once it surpasses the 2018 record of 34 days.
03:20 – Coverage of this week’s FOMC meeting, including the 25 basis point cut to the federal funds rate, two diametric dissents, the themes and opinions driving that decision, and Chair Powell’s warning that another rate cut in December is far from guaranteed as we see signs of a weakening labor market, elevated inflation, and a lack of data to make informed decisions due to the government shutdown.
05:43 – In reaction to the FOMC meeting and Powell’s assertion that a December rate cut is less likely than previously expected, the markets experienced a bit of a reversal of recent gains that were driven by that expectation.
07:43 – We discuss the five candidates that Treasury Secretary Scott Bessent revealed this week. They include three current and former Fed Governors, the current Director of the National Economic Council, and a BlackRock executive.
10:03 – Q3 earnings reports continue to send the stock market higher. The reports from this week’s big companies were Amazon and Alphabet, which were both positive, Apple, which underwhelming but not bad, and Meta and Microsoft, which were both somewhat negative.
12:25 – Positive news from trade talks between the United States and China might reduce the elevated sentiment of geopolitical risk that hit the markets in the first few months of the year on tariff threats, and which has been a question mark ever since.
14:58 – The fixed income market has seen some widening in credit spreads following the FOMC meeting, but generally positive credit conditions and future corporate bond issuance herald a robust November.
Additional Resources
Read: The Gentle Cut: Easing Without Euphoria – 10/29/2025 FOMC Update
Ask: Key Questions: Active ETFs or Mutual Funds: Which Belongs in Your Portfolio?
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