Market Update: 15th September 2025 – All Eyes on the Fed

Markets are moving into the week with one clear focus: the Federal Reserve’s interest rate decision. After months of speculation, the time has come for Chair Jerome Powell and his colleagues to make the call on whether to finally start cutting rates.

The Fed Decision

• A 25bps cut is widely expected. The market has pretty much priced this in, so the real action will come from the Fed’s tone and the new “dot plot.”

• Traders want to see how many cuts the Fed is pencilling in for the rest of the year. Anything short of two or three may disappoint.

• Powell’s press conference will be key: does he lean more on inflation still being sticky, or on the slowdown in jobs and consumer spending?

Why It Matters
• Inflation data has softened a touch, particularly on the wholesale side, but consumer inflation is proving more stubborn.

• The U.S. labour market is cooling but not collapsing which gives the Fed room to cut, but not carte blanche.

• If Powell strikes a cautious note, we could see a “sell the news” reaction markets have been running hot on expectations of easing.

Elsewhere This Week

• Global central banks: Canada is likely to follow with a cut, while the Bank of England and Bank of Japan are expected to hold. This divergence could stir FX volatility.

• Energy markets: Oil remains firm after renewed strikes on Russian refineries. That keeps inflation risk simmering in the background.

• Key U.S. data: Retail sales, building permits, and labour indicators will round out the week. These will give more colour on how much room the Fed really has to manoeuvre.

Final Thoughts

The Fed will almost certainly deliver the first cut, but it’s the guidance that matters. Markets want reassurance that this isn’t a one-and-done move. Anything less dovish could prompt a sharp adjustment across equities, bonds, and currencies.

For now, expect volatility around mid-week as traders reposition on every word Powell says.

Anyway, till next time, all of you trade safe!

By James Trescothick
Head of Market Research and Market Analyst

Risk Disclaimer: This information is for educational purposes only and does not constitute investment advice. Financial markets involve risks, and past performance is not indicative of future results. Always conduct your own research and seek professional advice before making investment decisions