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September 17, 2025
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Fed Cuts Amid Deep Policy Division

  • Fed cuts rates 25bp as expected, with new Trump appointee Miran dissenting for a 50bp reduction.
  • Labour market weakness drove the policy shift as job growth averages 29k monthly, below the levels likely needed to maintain stable unemployment.
  • Projections show a 9-9 split between one or two more cuts in 2025, and only one more in 2026. The FOMC is not as dovish as the market's pricing.
September 17, 2025
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BoC Cuts Amid Trade War Damage

  • The Bank of Canada cut the overnight rate by 25bp to 2.5% amid 7.1% unemployment and a 1.6% Q2 GDP contraction from US tariffs.
  • Core inflation remains elevated, with the CPI rate at 1.9% but preferred measures around 3%, constraining aggressive easing despite growth weakness.
  • The BoC's forward guidance signals it is "proceeding carefully" with October cut probability around 60%, and the terminal rate at 2.25%.

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