Fed Minutes: Rate Cuts, Job Woes, and the Dreaded Government Shutdown

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The minutes from the great, all-powerful United States Federal Reserve’s meeting on September 16-17 will be unleashed upon the public this Wednesday at 18:00 GMT. Such an eagerly awaited event, right? The financial world waits with bated breath.

At this momentous gathering, the mighty Fed, led by the valiant Jerome Powell, decided to reduce the policy rate by a modest 25 basis points, bringing it to a range of 4%-4.25%. But wait, not all were pleased-Fed Governor Stephen Miran was, as expected, more of a risk-taker and preferred to lower the Fed funds rate by a daring 50 bps. A true rebel. 🌍

The Great Decision: Powell and Company Lower the Rate in September

The Federal Open Market Committee (FOMC) reached the widely anticipated decision to reduce the interest rate by 25 bps. So, no surprises here. How thrilling! 🙄

In the statement, the Fed acknowledged that job gains were slowing down, and in the most reassuring tone possible, confirmed that inflation remained “somewhat elevated.” Lovely. But don’t worry, they have a plan.

00 GMT this Wednesday. Hold on to your seats! 🪑

According to the always-accurate CME FedWatch Tool, markets are currently banking on a 25 bps rate cut in the October meeting. There’s an 80% chance of another 25 bps reduction in December, too. Clearly, the USD is on shaky ground, folks. 🤷‍♂️

If the minutes confirm that policymakers are leaning toward rate cuts for the rest of the year, brace yourselves-the US Dollar (USD) could weaken against its rivals. But don’t fret too much-this could be short-lived. After all, we’re all eagerly awaiting news on the government shutdown.

If, on the other hand, the discussions reveal that some Fed officials are hesitant to lower rates due to a possible improvement in the labor market or stubborn inflation, the USD might hold its ground. Or not. Who really knows? 🙃

But don’t get too excited-market participants might refrain from making any big moves until the release of delayed macroeconomic data, including Nonfarm Payrolls for September. And you thought this was all straightforward. Hah!

And now, a brief technical outlook for the USD Index from Eren Sengezer, the European Session Lead Analyst at FXStreet, who definitely knows more than we do:

“The Relative Strength Index (RSI) on the daily chart is rising toward 60, and the USD Index is trading above the 100-day Simple Moving Average (SMA), with a pivot at 98.20. On the upside, 99.40 (Fibonacci 23.6% retracement of the January-July downtrend) is the next resistance level, followed by 100.00 (round level) and 101.35 (200-day SMA). Sounds easy enough, right?”

“But if the USD Index fails to hold above 98.20, the technical buyers might lose interest. In this case, we could see 97.70 (20-day SMA) as interim support, before 96.20 (end-point of the downtrend) and 95.00 (round level). Can’t wait to see how that turns out.” 😬

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2025-10-08 19:02