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Global equities trade in record territory.

The Week in Markets

🦅 Fed rate cuts finally arrive

The Fed delivered its first cut of 2025, trimming the funds rate to 4.00-4.25%. Markets whipsawed - Treasuries rallied then faded and the dollar’s initial drop retraced - as investors debated how quickly easing will follow and how politics may shape the path.

Federated Hermes called it a “risk-management” move and still expects two more 25bp cuts in 2025 (aiming 3.50–3.75%) - supportive of adding front-end duration and high-quality carry while avoiding big curve bets.

State Street Investment Management linked the cut to a multi-year USD bear thesis, with rising hedge ratios; they favour keeping FX hedges on US exposures and short-USD vs EUR/JPY. Schroders warned easing into tight labour markets risks inflation re-acceleration into 2026 (~3.3%), leaving long-dated Treasuries vulnerable...

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Although navigating by the stars can seem brave and adventurous, we would not recommend it on financial markets. Better be equipped with a solid compass!

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