The Cut Is Priced—The Message Is Not
Markets have already engraved a 25-basis-point reduction into stone: CME’s FedWatch puts the odds at 96 %. What traders really want is a roadmap for the next four months, not the headline they already own.

Why the Fed Is Finally Blinking
The pivot is born of two realities:

1. The U.S. labour market is wheezing. April–June averaged only 29 k new jobs a month—the weakest three-month stretch outside a recession since 2010. Job openings have dipped below the number of unemployed, initial claims are at a four-year high, and long-term unemployment is back to late-2021 levels.

2. Policy-makers now believe the tariff-related bump in prices is “one-and-done.” Chair Powell’s Jackson Hole line—“the downside risks to employment have increased”—was the unofficial starter’s gun for the cutting cycle.

Unknown #1: The Dot Plot—How Many More in 2025?
With September’s move baked in, every eye is on the refreshed “dot” diagram.

• Futures are pricing better-than-even odds for October and December cuts.

• Goldman expects the median dot to show only two moves in total this year, leaving the market a full cut too dovish. A slower pace could spark a risk-asset repricing; a third dot would be rocket fuel for bulls.
  Watch also for dissenters: new governor Stephen Miran wants 50 bp now, while inflation hawks Schmid and Musalem may vote “no” altogether. The split itself will be news.

Unknown #2: Powell’s Tone—Balancing Two Mandates Under One Microphone
The statement will be dry; the presser won’t. Powell must sound:

• Data-dependent enough to keep October live,

• Dovish enough to defend the employment mandate,

• Hawkish enough to keep long-term inflation expectations anchored.
  Expect the word “recalibrate” rather than “pivot,” and at least three uses of “meeting-by-meeting.”

Unknown #3: Politics—The Fed’s Independence Is on the Docket
Never before has a sitting president tried to fire a governor mid-term. Trump’s attempt to remove Lisa Cook—blocked for now by an appeals court—plus the lightning confirmation of Stephen Miran (sworn in Tuesday morning just in time to vote) turns the FOMC into a political arena. Markets hate nothing more than a central bank that looks like a committee of the White House.

Bottom Line
The 25 bp cut is trivia. What matters is whether the dots, the chair and the governance drama collectively tell us 2025 is a slow-scalpel year or a rapid-easing rescue. Portfolios will move on the nuance, not the headline.

The Cut Is Priced—The Message Is Not
Markets have already engraved a 25-basis-point reduction into stone: CME’s FedWatch puts the odds at 96 %. What traders really want is a roadmap for the next four months, not the headline they already own.

Why the Fed Is Finally Blinking
The pivot is born of two realities:

1. The U.S. labour market is wheezing. April–June averaged only 29 k new jobs a month—the weakest three-month stretch outside a recession since 2010. Job openings have dipped below the number of unemployed, initial claims are at a four-year high, and long-term unemployment is back to late-2021 levels.

2. Policy-makers now believe the tariff-related bump in prices is “one-and-done.” Chair Powell’s Jackson Hole line—“the downside risks to employment have increased”—was the unofficial starter’s gun for the cutting cycle.

Unknown #1: The Dot Plot—How Many More in 2025?
With September’s move baked in, every eye is on the refreshed “dot” diagram.

• Futures are pricing better-than-even odds for October and December cuts.

• Goldman expects the median dot to show only two moves in total this year, leaving the market a full cut too dovish. A slower pace could spark a risk-asset repricing; a third dot would be rocket fuel for bulls.
  Watch also for dissenters: new governor Stephen Miran wants 50 bp now, while inflation hawks Schmid and Musalem may vote “no” altogether. The split itself will be news.

Unknown #2: Powell’s Tone—Balancing Two Mandates Under One Microphone
The statement will be dry; the presser won’t. Powell must sound:

• Data-dependent enough to keep October live,

• Dovish enough to defend the employment mandate,

• Hawkish enough to keep long-term inflation expectations anchored.
  Expect the word “recalibrate” rather than “pivot,” and at least three uses of “meeting-by-meeting.”

Unknown #3: Politics—The Fed’s Independence Is on the Docket
Never before has a sitting president tried to fire a governor mid-term. Trump’s attempt to remove Lisa Cook—blocked for now by an appeals court—plus the lightning confirmation of Stephen Miran (sworn in Tuesday morning just in time to vote) turns the FOMC into a political arena. Markets hate nothing more than a central bank that looks like a committee of the White House.

Bottom Line
The 25 bp cut is trivia. What matters is whether the dots, the chair and the governance drama collectively tell us 2025 is a slow-scalpel year or a rapid-easing rescue. Portfolios will move on the nuance, not the headline.