Overview

• Fed Vice Chair Michelle Bowman said she still expects two additional 25-basis-point reductions before year-end, citing continuing job losses and softer consumer spending.
• Chair Jerome Powell warned that downside risks to employment have increased and indicated he could support another quarter-point cut later this month based on private readings and internal analysis.
• The partial government shutdown has blocked key releases from agencies such as the Bureau of Labor Statistics, forcing policymakers to lean on nonofficial measures of hiring, layoffs and job availability.
• Powell linked slower payroll growth partly to reduced immigration and noted that tariffs have lifted some goods prices even as broader inflation pressures appear contained.
• The Fed cut rates on September 17 to a 4.00%–4.25% target range and Powell signaled the balance-sheet runoff could end in the coming months ahead of the Oct. 28–29 policy meeting, which investors widely expect could deliver another 25-basis-point move.