Overview

• The Federal Reserve cut rates by 25 basis points to 4.00%–4.25% and its dot plot points to two additional cuts in 2025 as growth forecasts were raised while inflation and unemployment projections were held steady.
• Fed projections show wide dispersion for next steps, with most officials expecting at least one more 2025 cut and one policymaker penciling in six, as debate over balancing inflation and labor risks persists.
• Minneapolis Fed President Neel Kashkari backed this week’s move and said two more quarter‑point cuts this year would likely be appropriate to counter rising job‑market risks, while leaving open the option to pause if inflation surprises.
• The Bank of Japan kept its policy rate at 0.5% but moved to unwind past easing by planning annual sales of ETFs and J‑REITs—about ¥330 billion and ¥5 billion in book value—with amounts calibrated to roughly 0.05% of market turnover.
• Two BOJ board members, Hajime Takata and Naoki Tamura, dissented in favor of a 25 bp hike, driving a sharp repricing as 2‑year JGB yields rose to about 0.90%–0.91% and 5‑year to near 1.20%, the highest since 2008, with traders lifting odds of an October hike.