September 18, 2025 • 3 mins
The US Federal Reserve has cut interest rates for the first time since December.
It's a 0.25 point drop, much lower than US President Donald Trump wanted.
Sam Dickie from Fisher Funds explained further.
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Episode Transcript
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Speaker 1 (00:00):
Now, this morning, the FED delivered what markets had been
expecting for weeks. It was a twenty five basis point
rate cut. But the thing is that the US medium
term interest rates actually higher following the cuts. So let's
have a look at what's going on here. Sam Dickey
from Fisher Funds is with us.
Speaker 2 (00:13):
Ay, Sam, good evening here.
Speaker 1 (00:15):
Why did the interest rates rise and how did the
other asset classes react.
Speaker 2 (00:20):
It does seem like a bit of a paradox. You
cut your benchmark rate and market interest rates go up.
But like you said, this had been fully expected by
the market ever since the US job market started to
soften in earlier was so. In fact, at this time yesterday,
the market was pricing a one hundred and five percent
chance of a rate cut today, which is a silly number.
(00:41):
What that really means is the market was pricing a
small chance of two rate cuts today. So the market
was a little disappointed. The old buy the rumor, sell
the fact. But on top of that, Paldin commit to
aggressive easing. He said he would do a kind of
meeting by meeting approach, and in fact, the FED raised
their full year growth for cast from one point six
(01:01):
to one point eight percent, So many in the market
were hoping, you just commit to a fairly aggressive easing
policy on the back of extremely weak jobs numbers, but
he didn't do that. Other asset classes were pretty muted.
US equities march higher, of course, upper touch. But the
big move was the dollar. So because interest rates are higher,
that means investing the US dollar and putting money in
(01:23):
the bank there is relatively more attractive. So the US
dollar went up, and things like the KI dollar and
Aussie dollar fell very sharply on the back of it.
Speaker 1 (01:30):
Now, what do you think is the real story behind
the Fed's nine month paused before this?
Speaker 2 (01:35):
Yes, a lot of intrigue around this. So you have
to take your hat off to Powell and co. For
standing fast for nine months in the face of President Trump.
So President Trump has called him in recent months he
complete failure and a real dummy because he should have
cut rates some time ago according to the administration. Of course,
presidents want to pressure the FED to his rates rapidly
(01:56):
because it stokes the economy and makes the administration look
good ahead of mid term action next year. But the Feed,
on the other hand, has been concerned about the inflationary
impact of tariffs, especially now tariffs have saddled, settled, and
the rubber's going to meet the road there.
Speaker 1 (02:11):
What do you think this all means for investor, Sam?
Speaker 2 (02:14):
I don't think Power is playing politics. I think he
is doing what he's supposed to do, which is as
maintainers independence, which I take my hat off to him.
Remember inflation that the rubber does meet the road on
inflation from here. So Home Depot, who we spoke to recently,
who have held pricing firm despite the fact they import
a lot of goods from around the world the subject
(02:35):
to tariffs. They had a lot of low price inventory
that they imported before the tariffs hit, but they basically
run out of that low priced inventory and they are
strongly signaling that they will lift prices from here. So
if we do start to see a rise in inflation,
that might sort of tie the Fed's hands a wee bit.
But if not, there's plenty more room to ease.
Speaker 1 (02:57):
Okay, Sam, Look, it's good to talk to you, as always,
to talk to you again. Have your soon. Sam Dickey Official.
Speaker 2 (03:01):
Funds for more from Hither Duplessy Allen Drive listen live
to news talks. It'd be from four pm weekdays, or
follow the podcast on iHeartRadio
Now, this morning, the FED delivered what markets had been
expecting for weeks. It was a twenty five basis point
rate cut. But the thing is that the US medium
term interest rates actually higher following the cuts. So let's
have a look at what's going on here. Sam Dickey
from Fisher Funds is with us.
Speaker 2 (00:13):
Ay, Sam, good evening here.
Speaker 1 (00:15):
Why did the interest rates rise and how did the
other asset classes react.
Speaker 2 (00:20):
It does seem like a bit of a paradox. You
cut your benchmark rate and market interest rates go up.
But like you said, this had been fully expected by
the market ever since the US job market started to
soften in earlier was so. In fact, at this time yesterday,
the market was pricing a one hundred and five percent
chance of a rate cut today, which is a silly number.
(00:41):
What that really means is the market was pricing a
small chance of two rate cuts today. So the market
was a little disappointed. The old buy the rumor, sell
the fact. But on top of that, Paldin commit to
aggressive easing. He said he would do a kind of
meeting by meeting approach, and in fact, the FED raised
their full year growth for cast from one point six
(01:01):
to one point eight percent, So many in the market
were hoping, you just commit to a fairly aggressive easing
policy on the back of extremely weak jobs numbers, but
he didn't do that. Other asset classes were pretty muted.
US equities march higher, of course, upper touch. But the
big move was the dollar. So because interest rates are higher,
that means investing the US dollar and putting money in
(01:23):
the bank there is relatively more attractive. So the US
dollar went up, and things like the KI dollar and
Aussie dollar fell very sharply on the back of it.
Speaker 1 (01:30):
Now, what do you think is the real story behind
the Fed's nine month paused before this?
Speaker 2 (01:35):
Yes, a lot of intrigue around this. So you have
to take your hat off to Powell and co. For
standing fast for nine months in the face of President Trump.
So President Trump has called him in recent months he
complete failure and a real dummy because he should have
cut rates some time ago according to the administration. Of course,
presidents want to pressure the FED to his rates rapidly
(01:56):
because it stokes the economy and makes the administration look
good ahead of mid term action next year. But the Feed,
on the other hand, has been concerned about the inflationary
impact of tariffs, especially now tariffs have saddled, settled, and
the rubber's going to meet the road there.
Speaker 1 (02:11):
What do you think this all means for investor, Sam?
Speaker 2 (02:14):
I don't think Power is playing politics. I think he
is doing what he's supposed to do, which is as
maintainers independence, which I take my hat off to him.
Remember inflation that the rubber does meet the road on
inflation from here. So Home Depot, who we spoke to recently,
who have held pricing firm despite the fact they import
a lot of goods from around the world the subject
(02:35):
to tariffs. They had a lot of low price inventory
that they imported before the tariffs hit, but they basically
run out of that low priced inventory and they are
strongly signaling that they will lift prices from here. So
if we do start to see a rise in inflation,
that might sort of tie the Fed's hands a wee bit.
But if not, there's plenty more room to ease.
Speaker 1 (02:57):
Okay, Sam, Look, it's good to talk to you, as always,
to talk to you again. Have your soon. Sam Dickey Official.
Speaker 2 (03:01):
Funds for more from Hither Duplessy Allen Drive listen live
to news talks. It'd be from four pm weekdays, or
follow the podcast on iHeartRadio
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