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Aug 26, 2025

Weekly Market Commentary |
August 25, 2025

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08.25.25

The Markets

Will the Fed lower rates?

Last week, in a much-anticipated speech, Federal Reserve (Fed) Chair Jerome Powell said, “In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation…Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”

Investors celebrated and financial markets rallied.

“Powell’s speech sparked the strongest cross-asset rally since April…,” reported Rita Nazareth of Bloomberg. On Friday, “The S&P 500 climbed 1.6 [percent], with tech megacaps rebounding. The Russell 2000 of small firms jumped about 4 [percent]. Two-year yields sank 11 basis points to 3.68 [percent]. Traders boosted bets on a Fed cut next month, pricing in an 85 [percent] chance of a move. The dollar fell.”

Monetary policy – the steps the Fed takes to maximize employment and keep prices stable – can be:

Restrictive when the federal funds rate is high enough to restrain economic activity and curb inflation.
Neutral when the federal funds rate is at a level that does not stimulate or restrain the economy.
Accommodative when the federal funds rate is low enough to stimulate economic activity and reduce unemployment.

Recent economic data showing a slowdown in employment and an uptick in inflation complicate the upcoming rate-setting decision, reported Joseph E. Gagnon of the Peterson Institute for International Economics.

When the Fed lowers the federal funds rate, the cost of borrowing moves lower as rates on home equity loans, auto loans, and credit cards typically follow the Fed. Lower borrowing costs may create opportunities for businesses to invest in new ventures and hire more workers. A rate cut also can boost consumer spending, reported Sarah Foster of Bankrate. The exception to this rule is mortgage loans. The rate for 30-year fixed mortgages typically tracks the benchmark 10-year Treasury note.

Last week, after the Fed Chair’s speech, the Dow Jones Industrial Average closed at a record high, and U.S. Treasuries rallied as yields moved lower, reported Karishma Vanjani of Barron’s.

WHAT DO YOU KNOW ABOUT FASHION? The fashion industry is an important part of the global economy. It employs 300 million people and is expected to have global revenue of $2 trillion by 2026, reported Elaine Ritch for Economics Observatory.

Like all industries, fashion has hits and misses. There are trends that shine and trends that perplex. Consider Big Red Boots (BRBs), which were introduced at New York Fashion Week in 2023. The cartoon-style boots looked like they’d been pulled from Mario’s closet and retailed for $350. Their popularity was tempered by suction issues – the grippy rubber boots proved difficult to remove, reported Christian Allaire of Vogue.

See what you know about fashion trends today, and in the past, by taking this brief quiz:

The Communist Party reportedly does not approve of the latest fashion trend in China, but demand for a particular type of sun protection gear has been on the rise. What are Chinese women wearing to the beach?
1. Glare goggles
2. Sunsuits
3. Shade sleeves
4. Facekinis

People of a certain age may remember platform shoes as a disco-era wardrobe necessity. The 70’s weren’t the first time thick-soled shoes trended, though. In 16^th century Venice, “chopines” – boots with platforms that were up to 20 inches tall – were popular.Theboots were worn to:
1. Strengthen ankles and calves.
2. Provide protection in combat.
3. Protect shoes and dresses from muck.
4. Wade across shallow canals.

In the 1960s, dresses made of an unusual material that was printed with geometric patterns became very popular. What were the dresses made of?
1. Polyester
2. Paper
3. Chocolate
4. Vinyl

Which of the following is NOT an iconic fashion piece, according to Glam Observer?
1. Little black dresses
2. Poodle skirts
3. Denim jeans
4. Trench coats

WEEKLY FOCUS – THINK ABOUT IT

“The best fashion show is definitely on the street. Always has been and always will be.”

— Bill Cunningham, Photographer

Answers: 1) d; 2) c; 3) b; 4) b

Best regards,

Dennis Greensage

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* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

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* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

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* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

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* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

https://www.federalreserve.gov/newsevents/speech/powell20250822a.htm

https://www.bloomberg.com/news/articles/2025-08-21/stock-market-today-dow-s-p-live-updates?srnd=phx-markets or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-25-25-Bloomberg-Wall-Street-Has-Best-2.pdf

https://www.investopedia.com/terms/m/monetarypolicy.asp

https://www.federalreserve.gov/faqs/what-does-the-federal-reserve-mean-when-it-says-monetary-policy-remains-accommodative.htm

https://www.piie.com/blogs/realtime-economics/2025/feds-september-dilemma

https://www.bankrate.com/banking/federal-reserve/how-federal-reserve-impacts-your-money

https://www.fanniemae.com/research-and-insights/publications/housing-insights/rate-30-year-mortgage

https://www.barrons.com/livecoverage/stock-market-news-today-082225/card/dow-marks-first-record-close-of-the-year-as-s-p-500-nabs-new-high-3FEYOjg5CcgmPAwTmvae or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-25-25-Barrons-Dow-Markets-First-Record-8.pdf

https://www.economicsobservatory.com/fast-fashion-what-are-the-true-costs