Newscasts - Market expert sees Fed rate cut on Wednesday followed by 'pause'

Royal Bank of Canada

09/12/2025 22:11

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Source: 'Reuters - Business videos'

Description: Andrzej Skiba, Head of U.S. Fixed Income, RBC Global Asset Management, says the Federal Reserve is likely to deliver a rate cut tomorrow but says the economy's momentum means there is no further need "for rate cuts right now."

Short Link: https://lseg.group/4iMaz6N

Video Transcript:

We're looking forward to the Fed's announcement tomorrow with anticipation. Our base case assumes a cut, however, a hawkish cut with a potential indication of a pause that could happen afterward. In our opinion, inflation data and labor market data should lead the Fed to take a pause after a number of rate cuts and assess as conditions evolve early in the next year. Market participants will be closely watching for dissenters, both in terms of dissenting to advocate for cuts that are larger than the one we're likely to get, the 25 basis points, tomorrow but also for those that believe there is no need in the US economy for rate cuts right now. As far as we are concerned, after this cut, you could easily be in a situation where, as we see accelerating US growth in 2026, there is no more need for rate cuts. We might get one for political reasons, as Fed leadership changes in May. However, the economy itself might not warrant another cut for some time to come.