Societe Generale: After the Federal Reserve's decision, the market's focus returns to inflation data

Societe Generale said the Fed's decision to cut interest rates by 25 basis points was in line with consensus expectations and did not disappoint. Our unconventional forecast of a 50 basis point cut did not materialize, but as we said last week, if the September meeting decided to cut interest rates by 25 basis points, it is likely to continue to cut interest rates by 25 basis points each in October and December. The median dot plot does confirm this. We also note that the Federal Reserve expects interest rates to reach 3.38% by the end of 2026, which is in line with our forecast but nearly 50 basis points above current market pricing. Next week, the market focus will shift entirely to personal income and expenditure data and the Federal Reserve's preferred inflation indicator, the personal consumption expenditure price index (PCE). (Golden Ten)