Cookie Settings
Linked in logo
Contact Us
Generali Investments Logo in red

The Fed is about to cut, as the labour market gets more attention.

In Short

Improvements in inflation and higher potential risks for the labour market are eventually leading the Fed to cut rates. Barring any very nasty surprises in the July and August price data releases, the September cut, which is already priced in by the market, is an almost done deal. The tone of the press releases clearly indicates the change in outlook and the shift in policy priorities (see below), with the unemployment mandate increasing in importance.

Highlights:

  • The first rate cut is only postponed, most likely to September. The Fed appears happy with the Q2 inflation progress and is shifting attention to the labour market outlook. 
  • The FOMC sees the economy as broadly rebalancing amid solid demand growth, and a significant downturn of the labour market appears a tail risk. But the string of good inflation prints was not yet long enough for a July cut.
  • Fed’s mild dovishness contrasts with the hawkish tilt of the BoJ Japan, which raised the policy rate to 0.25% earlier than expected and despite mixed evidence on inflation. Further monetary tightening will come from the widely expected start in the reduction of asset purchases. 
     

Download the full publication below

The Fed is about to cut, as the labour market gets more attention
Expertise
Responsible Investing
Insights
About Us
Contact
Picture
Generali Investments logo in grey

© Generali Investments, all rights reserved. This website is provided by Generali Investments Holding S.p.A. as the holding company of the main asset management companies of the Generali Group having, directly or indirectly, the majority shareholding in the companies listed below (hereinafter jointly, “Generali Investments”). This website may contain information related to the activity of the following companies: Generali Asset Management S.p.A. Società di gestione del risparmio, Infranity, Sycomore Asset Management, Aperture Investors LLC (including Aperture Investors UK Ltd), Plenisfer Investments S.p.A. Società di gestione del risparmio, Lumyna Investments Limited, Sosteneo S.p.A. Società di gestione del risparmio, Generali Real Estate S.p.A. Società di gestione del risparmio, Conning* and among its subsidiaries Global Evolution Asset Management A/S - including Global Evolution USA, LLC and Global Evolution Fund Management Singapore Pte. Ltd - Octagon Credit Investors, LLC, Pearlmark Real Estate, LLC as well as Generali Investments CEE. *Includes Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning Investment Products, Inc., Goodwin Capital Advisers, Inc. (collectively, “Conning”).

Legal Information
Cookies Policy
Privacy Policy
Terms and Conditions
Copyright
Glossary