Fed Wrap – The Fed delivers another risk management cut

Ryan Weldon, from IFM’s Debt Investments team in New York, features in our Fed Wrap market update videos discussing central bank themes in debt markets, with a particular focus on the US Federal Reserve (Fed).

In this edition, Ryan discusses the outcomes of the October Fed meeting, the reasons for the Fed’s risk-management cut, and the Fed’s expectations heading into the December meeting.

At the October meeting, the Federal Reserve cut rates by 25bp, lowering the upper band of their policy rate to 4%. There were two dissents with Miran voting in favor of a larger 50bp cut and Schmid voting in favor of no cut at all. The statement and dissents on both sides of the policy decision highlight the uncertainty that the Fed faces with most critical data prints suspended during the government shutdown.

The changes to the statement were minimal with the Fed highlighting that inflation has increased and remains elevated and that the risk to employment has risen in recent months.