Weekly Economic Pulse: Meh

2025-09-17 04:40:00 ET

With the dollar index and interest rates in downtrends, it seems the US economy is slowing absolutely and relative to the rest of the world. The slowdown, so far, doesn’t look that severe, and we are likely to get a rate cut from the Fed this week. Last September the Fed surprised the market with a 50 basis point cut and then followed that up with two more cuts before the election. There was - and is - a lot of speculation that the move was politically motivated but I don’t see it that way - and neither does the market. The economy was slowing before that cut; that’s why the 10-year rate had fallen over 100 basis points from April to September. Long-term interest rates started to rise almost immediately after the September cut and ultimately moved up about 120 basis points by the end of the year. Rising long-term rates is an indication that nominal growth expectations are rising - which is exactly what you should want after a rate cut. If they had cut and long-term rates continued to fall, that would have been the market saying “you didn’t do enough”....

Read the full article on Seeking Alpha

For further details see: