INSIGHTS
By
Brad Atkins,
Chief Executive Officer
Aug 28, 2025
Markets are betting on a September cut—but the next 30 days will be decided by jobs and CPI. Expect headline risk and swings in rate-sensitive sectors. Here’s what advisors should watch and how to prep clients without overreacting.
Intro
As we head into September, I want to share some thoughts on where the economy stands and, more importantly, what could matter most for our clients in the coming weeks. The Federal Reserve is at a crossroads. Markets are betting heavily on a rate cut next month, but I don’t think we should take that outcome as guaranteed—or assume it will come without risks.
Why the Next Fed Move Matters
For months, the Fed has tried to walk a fine line between bringing inflation down and not tightening so much that the economy stalls. Chair Powell’s recent comments suggest the Fed is preparing to ease, and futures markets now imply a strong probability of at least one cut in September. That’s helped fuel a rally across equities, particularly in rate-sensitive sectors.
But as advisors, we know markets often get ahead of themselves. What matters isn’t what traders expect—it’s what the data tells the Fed in the weeks ahead.
The Data That Could Tip the Scales
Two numbers will dominate the conversation between now and the September meeting:
The August jobs report. If we see hiring slow and wage growth cool, it strengthens the case for a cut.
The next inflation reading. A softer CPI number would give the Fed more room to move, while a hotter-than-expected print could stall or even derail those expectations.
These reports are arriving right up against the Fed’s decision date. Advisors should be prepared for increased market volatility around those releases.
Politics, Pressure, and the Fed
One additional layer here is politics. The Fed is meant to be independent, but it’s no secret that political leaders are leaning hard on the central bank to move faster. That pressure complicates things. If the Fed cuts now, it risks looking like it bowed to outside influence. If it waits, it risks accusations of being out of touch with economic reality.
As advisors, we need to remind clients that politics may shape headlines, but ultimately the Fed has to respond to the economic data.
What’s at Stake
Here’s how I see the tradeoff:
If the Fed cuts too soon, it could reignite inflationary pressures, which would force them into even more aggressive action later.
If they wait too long, the economy could lose momentum, and what starts as a “soft landing” could turn into something harder.
Neither outcome is ideal, but both are on the table. That’s why the September meeting may be the most important one we’ve seen in several years.
What Advisors Should Do Now
This isn’t the time to make reactionary moves, but it is the time to prepare clients for heightened uncertainty. In particular:
Set expectations. Volatility around economic releases will be elevated. Clients should expect it, not fear it.
Review portfolio positioning. Rate-sensitive areas may benefit from easing, but valuations are already stretched. Balance remains critical.
Keep perspective. A single Fed decision does not define the long-term path of markets. What matters is how inflation and growth evolve in tandem over the next several quarters.
Final Thoughts
In my view, the Fed is under more pressure now than at any time in recent memory. Markets want relief, politicians want action, and the data is still sending mixed signals. Advisors should watch closely over the next 30 days—but just as importantly, we need to help clients avoid overreacting to short-term noise.
The Fed may well deliver a cut in September. Whether it brings relief or regret is something we’ll only know with time.
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