Markets signal more Fed rates cuts ahead. After the Federal Reserve cut interest rates last week, Fed funds futures are pricing in high odds that the central bank will ease monetary policy again at the next two policy meetings remaining in 2025. The policy-sensitive 2-year yield is trading well below the current target-rate range, which equates with expectations for more rate cuts. Meanwhile, TMC Research’s Fed funds model is indicating that policy remains moderately tight, which implies the central bank will continue to ease.

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● How Progress Ends: Technology, Innovation, and the Fate of Nations
Carl Benedikt Frey
Review via Publishers Weekly
Technological advancement stagnates when met with bureaucratic sclerosis and corporate monopoly, according to this probing study from Oxford economic historian Frey (The Technology Trap). From early civilizations to the modern era, Frey examines countervailing systems for nurturing technological progress. One is a centralized state that imposes change from the top—like ancient China, which developed cast iron, printing, and other technologies long before Europe did. The other is a decentralized system that encourages exploration—as in the U.S. from the Industrial Revolution onward—where inventors can find private and public investors to fund long-shot experiments. Moving to the present, Frey argues that Silicon Valley dominated the digital age through its startup and venture capital symbiosis, and China became an industrial behemoth with a hybrid of capitalist firms and a strong state. He’s pessimistic about the future prospects for innovation in both countries, however

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In a turbulent year for the fixed-income market, corporate bonds have emerged as the top performer for the asset class in 2025, based on a set of ETFs through Thursday’s close (Sep. 18).

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US jobless claims fell sharply, reversing the recent runup that lifted new filings for unemployment benefits to a four-year high during the previous week. “The decline is more noteworthy since claims in Texas, which drove a spike in the prior week, declined but remained elevated,” said Nancy Vanden Houten, lead US economist at Oxford Economics. “Sorting through the noise, initial claims are still consistent with a relatively low pace of layoffs.”

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Thank you, sir, may I have another?

That’s the main takeaway for markets-based rate cut expectations following the Federal Reserve’s widely-expected ¼-point cut for its target rate announced on Wednesday. Although key Treasury yields popped yesterday (suggesting anxiety about rate cuts when inflation is edging higher and is well above the Fed’s 2% target), market signals still point to expectations that the Fed will continue to ease monetary policy. The driving factor for the Fed’s decision: a slowing labor market, which the central bank sees as the bigger risk at the moment vs. inflation.

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The US 10-year yield rose on Wednesday, a day when the Federal Reserve cuts its target rate. As expected, the central bank reduced the Fed funds rate by 1/4 point to a 4.0%-to-4.25% range. The 10-year yield briefly ticked below 4.0% during yesterday’s session, but by the close rose 4.09%, the highest since Sep. 9.

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The performance of initial public offerings (IPOs) this year had been lackluster before August, trailing US stocks overall, based on an ETF tracking these securities vs. the S&P 500 Index. The relatively weak results for IPO didn’t surprise analysts, who’ve been arguing that private equity has been stealing the thunder of public offerings and keeping the best new companies from going public. But in recent weeks, the performance of IPOs generally has turned up, and is now leading the equities market by a wide margin in 2025, based on a pair of ETFs.

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US retail sales beat expectations in August, rising for third straight month. “The American consumer appears to be in good spirits. That’s good news for the economy, but it may heighten debate over how aggressively the Fed needs to cut rates,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management.

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US economic activity is expected to downshift in the third quarter, but not enough to trigger a recession warning, based on the median estimate for a set of nowcasts compiled by CapitalSpectator.com.

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NY Fed Manufacturing Index turns negative in September. The unexpected decline reverses gains in the previous two months and marks the biggest monthly setback since June. The pullback partly reflected significant downturns by new orders and shipments.

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