Macro Minute: Week of September 22, 2025

The one takeaway that I come away with from all the Federal Reserve Dot Plots, Summary of Economic Projections, and the Fed speech is this; monetary policy is looking to support growth over the fight of inflation for the moment. As such, market reactions should begin to price in a dovish Federal Reserve. I know that every cycle is different, and this one is especially so. A lot of time the Federal Reserve is cutting because of economic weakness, and we have some of that right now, but the economy is being supported by CapEx spending and enough activity to have a current growth rate of around 3% GDP.  

At a high level, we have fiscal policy that is expansionary, a monetary policy that is loosening slowly, and an expansionary environment. It can always be said that economic growth is not evenly distributed and that there is a constant group of economic participants that are not able to keep up. Some people are calling it a k shaped economy, with certain participants doing well and some doing worse. It is the role of fiscal policy to try and even that distribution out. Policies can take time to begin to work, and some will be more successful than others.  

Getting out of the weeds of economic growth policies, it is important for us as investors to not get too far on one side or the other on a bullish or bearish stance. It is my opinion that we should go back to looking at policies as either expansionary or contractionary, growth as expanding or contracting, and considering if inflation stable. If we do that now, policies are expansionary, growth is expanding, and inflation is stable but at a higher level than desired. In checking all these broad categories, it leads me to a stance that you want to continue to hold long beta assets. Sometimes we can interject our feelings into our investment decisions and that is when we can talk ourselves into mistakes. Even if there is a time of heightened uncertainties like today, you should have a system that prevents you from taking too much or too little risk out of your portfolio. As always, stay diversified and stay invested.  

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