Global Financial Firms Shift Asia Expansion Focus to South Korea as China, India Face Caution 
Asian Stocks Slip as US-Iran Ceasefire Hopes Lift Oil, Dollar Strength Persists 
Trump Questions Housing Bill as He Prioritizes SAVE America Act 
US Stock Futures Steady as Investors Await Payrolls Data and Monitor Iran Tensions 
Japan Targets 1%+ Real Economic Growth With ¥370 Trillion Investment Plan 
China Expands Export Controls, Adds 20 Japanese Companies to Restricted List 
Asian Currencies Stay Range-Bound as Investors Eye China Data, RBNZ Outlook and U.S.-Iran Ceasefire 
Asian Stocks End Strong Quarter as Dollar Surges, Yen Hits 40-Year Low Ahead of US Jobs Data 
Trump Threatens 100% Tariffs on Countries Imposing Digital Services Taxes on U.S. Tech Firms 
Dollar Slips Ahead of Key U.S. Jobs Data as Fed Rate Outlook, ECB, and Iran Talks Shape Forex Markets 
China Sets 1.25% Overnight Reverse Repo Rate Below Market Expectations 
Gold Prices Drop as Fed Rate Outlook and Iran Tensions Weigh on Market 
Yen Falls to 40-Year Low as Markets Watch Japan Intervention and U.S. Jobs Report 
Canada Grants C$7 Million to Greenland Molybdenum Mine to Strengthen Critical Minerals Supply 
Oil Prices Slip as U.S.-Iran Peace Talks and Strait of Hormuz Risks Keep Markets on Edge 
Wall Street Ends Lower as AI Stocks Drag Markets, Fed Rate Outlook Shifts 
Wells Fargo analysts believe that the recent rate cut by the Federal Reserve is the beginning of multiple reductions aimed at fueling market growth opportunities in 2025. The bank advises focusing on the long-term trajectory of rates, not the size of individual cuts.
Last week’s 50 basis point (bps) rate cut caught some investors off guard, though the fed funds futures market had priced in a 58% chance. “The important concept to latch onto over the past two months was not the ultimate size of the first cut but that the September policy meeting represented the first in what is likely to be a series of Fed rate reductions expected to last well into next year,” wrote Wells Fargo analysts.
Economic Support and Labor Market Growth
The bank anticipates that the expected series of rate reductions will support economic growth and labor markets. Federal Reserve Bank of Chicago President Austan Goolsbee supported this view, suggesting that further rate cuts will likely be needed to bolster the economy.
Wells Fargo projects that the Fed will reduce rates by 25 bps at both of the remaining Federal Open Market Committee (FOMC) meetings in 2024, totaling 100 bps of cuts by year-end. However, the bank notes that the timing of potential rate cuts in 2025 is still uncertain.
No Recession Anticipated, Moderate Slowdown Expected
While Wells Fargo expects a slowdown in the U.S. economy toward the end of 2024, they do not predict a recession. Instead, the bank foresees a moderate economic slowdown, followed by a positive impact from rate cuts. By the first and second quarters of 2025, Wells Fargo expects the domestic economy to benefit from the easing cycle, which could also enhance S&P 500 earnings, as about 35% of the index’s revenues come from international markets.
"Last week’s Fed rate cut is just the beginning in what is likely to be a series of rate reductions that should help spark broader opportunities next year,” the bank concludes.
