Analysis of Fed decision and press conference on 17.09.2025

Flash note

Credit and EM spreads continue to tighten. The USD yield curve “twisted” last week while the ECB meeting pushed EUR rates higher across all maturities.

Meanwhile, are the tariffs actually helping the US trade deficit? Each week, the Syz investment team takes you through the last seven days in seven charts.

Most major U.S. stock indexes finished the week higher ahead of the Fed September 16–17 monetary policy meeting, at which the central bank is widely expected to lower short-term interest rates. Enthusiasm surrounding the ongoing AI boom—supported by Oracle’s announcement of a substantial guidance increase amid several large new AI deals—also helped lift major indexes. The Dow, S&P 500, and Nasdaq all notched new record highs during the week, although the Dow and S&P 500 both pulled back modestly in a relatively quiet trading session on Friday. The Russell 2000 Index also advanced, logging its sixth straight week of gains.

Today’s release of the August consumer price index (CPI) was mostly in line with expectations: Headline numbers came in a tad stronger than expected, and pushed the index up from 2.7% to 2.9%, while the core index (excluding prices for energy and food) stayed at 3.1%. Together with the softer than expected producer prices (PPI) from yesterday and higher than expected initial jobless claims (263k instead 236k, driven by a strong outlier from Texas) the CPI will not pivot the US central bank (FED) away from a 25 basis point rate cut in September. But we don’t expect a larger cut and remain sceptical about the 3 rate cuts the market is currently pricing for the remainder of the year – why is that?

US Treasury rates fell at the end of last week following the release of US employment data, as Fed’s rate cut expectations were revised.

Meanwhile, global stocks historically struggle in September. Each week, the Syz investment team takes you through the last seven days in seven charts.

Most U.S. equity indexes finished the holiday-shortened week higher. The Nasdaq Composite finished the week 1.14% higher, supported by shares of Apple and Google parent Alphabet, which both rose in the wake of an antitrust ruling that some investors viewed as less severe than expected. Smaller-cap stocks, which can be more sensitive to interest rate movements than larger companies, also advanced for the week. The S&P 500 Index added 0.33%, while the Dow Jones Industrial Average lost 0.32%. The week’s economic calendar brought several reports that painted a bleak picture of the health of the U.S. labor market.

The feud between President Trump and the Fed escalated further last week and France faces another episode of political instability. Long-term yields are rising on inflation and fiscal concerns, while credit and EM spreads widened.