Market Musings 7/30/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
September #RateCuts hopes? Not looking great…
The Fed just wrapped up its July meeting. No #RateCuts, but no one really expected it this month (except maybe the White House…).
Why are markets disappointed?
Well, investors were banking on #RateCuts in September. Heading into Wednesday, the odds of that were around two-thirds, but dropped below 50% after the meeting.
So what happened?
The Fed has two mandates: (1) keep inflation in check and (2) maximize employment.
On jobs fronts, #LaborMarkets are still strong. Unemployment is low, and the Fed thinks the #LaborMarkets are holding up well.
On #Inflation? Still not where they want it. Powell specifically pointed to goods #Inflation ticking up and he’s not convinced that all this trade deal and #Tariffs noise has cleared up enough to change course.
Basically, #LaborMarkets are solid, but #Inflation is still a question. So, the Fed’s staying on hold and still playing the “wait-and-see” card.
So now what?
A big takeaway from the meeting was the Fed’s #LaborMarkets focus on the unemployment rate. They even mentioned that fewer job gains might just be due to tight immigration policy and not a weakening economy.
Unless something breaks, it’s hard to see unemployment getting bad enough in just two months to move the Fed.
Could #Inflation cool fast enough instead? Maybe, but not likely. Like we’ve said before, #Inflation in goods is creeping up, and it takes time to tell if it’s just noise or the start of something real.
So unless we get a big surprise, the case for September #RateCuts is looking weaker and weaker.
Next up? Friday’s jobs report. That’ll be the unemployment rate data the Fed is watching…
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Original Photo by Pixabay.