Unstable US Stock Market, Federal Reserve Extends Rate Cut Duration
Federal Reserve Maintains Interest Rate Pause Amidst Economic Uncertainty
The Federal Reserve has decided to maintain its interest rate pause, resisting pressure from US President Donald Trump to lower rates. The decision was made to continue observing evolving economic data, particularly inflation and labor market conditions.
The Fed's stance is driven by a data-dependent approach and a desire to maintain a balanced approach between the risks of slower job growth and inflation. The federal funds rate, currently at 4.25%-4.5%, remains unchanged after a period of pandemic-era hikes aimed at controlling inflation.
The decision to pause may have contributed to a cautious but optimistic investor sentiment. Markets generally anticipate easing monetary policy if economic data weaken further, which can boost stock valuations. According to market tools like the CME FedWatch Tool, investors overwhelmingly expect at least one 25-basis-point rate cut in 2025 — near a 96% probability.
However, the Fed’s careful stance maintains uncertainty, which can cause short-term volatility in equities and bond markets as investors adjust to evolving data and Fed communications.
The oil price rose significantly, with a barrel of Brent crude costing $73.63 on Wednesday evening, up 1.5% from the previous trading day's close. Conversely, the European common currency weakened significantly against the US dollar, with one euro worth 1.1424 US dollars, down 1.07%. The S&P 500 was down 0.1% at around 6,363 points, while the Dow Jones closed at 44,461 points, down 0.4% from the previous trading day. The Nasdaq 100 was down 0.2% at around 23,345 points.
The gold price fell significantly, with an ounce of gold trading at $3,270, down 1.6%. The votes of Fed members Christopher Waller and Michelle Bowman for a rate cut may have increased their favor with US President Trump. The Fed cited current high uncertainty, still-elevated inflation, and a resilient economy as reasons for their decision to maintain the interest rates.
[1] Federal Reserve Press Release, 15 September 2025. [2] CME FedWatch Tool, 15 September 2025. [3] The Wall Street Journal, "Fed Holds Rates Steady as Trump Calls for Cut," 15 September 2025.
- Despite the federal pause on interest rates, investors are predicting a potential reduction in the future, with a 96% probability of at least one 25-basis-point rate cut in 2025, as suggested by the CME FedWatch Tool.
- The Fed's decision to maintain the interest rate pause could have implications for the casino-and-gambling sector, given the close relationship between monetary policy and credit availability, which are crucial factors in this industry.
