Diverging views on monetary policy: a closer look at the Fed's path forward
Update: 2025-09-23
Description
The Fed’s rate cut is in, just as the market expected – what’s next for the future of monetary policy?
Laurie Mount, Portfolio Manager with RBC BlueBay’s U.S. Fixed Income team, unpacks the Federal Reserve’s latest rate cut, economic projections, and what it all means for investors.
- The Fed cut rates by 25 basis points, lowering the target range to 4.00–4.25%, with projections showing stronger growth, higher inflation, and lower unemployment through 2026–27.
- Diverging views among FOMC members reveal uncertainty, with projections ranging from no more cuts to a 100-basis point reduction by year-end 2025.
- Chair Powell described the cut as a risk management move, emphasizing a data-dependent approach amid shifting risks to labor markets and inflation.
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