Fed Opens Door to Renewed Easing as Labor Market Softens

Capital Group’s Quick Take, authored by portfolio manager Ritchie Tuazon, assesses the Fed’s first rate cut in nine months and the implications for fixed income investors.

• The FOMC cut rates by 25 bps to 5.00–5.25%, with futures markets now pricing another 50 bps of easing through 2025 and a terminal rate near 3% by 2026.

• Labour market weakness is emerging, while tariff-related inflation risks are likely to be downplayed in favor of policy accommodation.

• Long-term Treasuries look attractive as curve steepening persists, though intermediate maturities appear more vulnerable.

How should investors position along the curve as the Fed balances growth risks with sticky inflation? Explore the full commentary for deeper insights.