Perspectives
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Monthly Macro Monitor: October 2025
Read More- The ongoing federal government shutdown has delayed the release of important economic data, and, thus, there were no official federal government releases of key employment and PCE metrics in October. Core CPI, which was also delayed but was released before month-end, declined slightly from the prior month.
- At the Fed’s October press conference, Chair Powell reiterated that the FOMC remains in a challenging situation, as tension between its dual mandate goals persists. Citing public and private sector data that have remained available, he noted that inflation risks continue to appear tilted to the upside and employment risks to the downside.
- In light of the balance of risks to both sides of its dual mandate, the Fed lowered the target range for the federal funds rate by 25 basis points in its second interest rate cut of 2025. During his remarks, however, Chair Powell stressed that FOMC members held strongly differing views regarding future monetary policy actions and that a December rate cut “is not a foregone conclusion – far from it.”
- Against a backdrop of light economic data releases and a more hawkish-than-expected Fed tone, benchmark interest rates and interest rate volatility declined, the yield curve flattened slightly, and Agency MBS spreads to benchmark rates tightened modestly during the month.
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Why Agency MBS: Market Snapshot
Read MoreAgency MBS assets benefit from compelling fundamentals and favorable attributes that make them a critical building block of any investment portfolio.