Fed Kicks Off Most Important Meeting of the Year

Summary

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WSJ What’s News: Fed Kicks Off Most Important Meeting of the Year

Date: September 16, 2025
Host: Kaitlin McCabe
Key Guests: Matt Grossman (WSJ Economics Reporter), Soundbites from Donald Trump, Stephen Miller, Patrick Coffey

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Episode Overview

This episode centers around the Federal Reserve’s most pivotal policy meeting of 2025, heightened political pressure from President Trump, and market anticipation over potential rate cuts. It also updates listeners on major foreign policy, technology investments, and developments in media and labor statistics.

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Federal Reserve’s Crucial September Meeting

Setting the Stage: Market and Political Tensions

• [00:18] Kaitlin McCabe introduces the day’s top stories, spotlighting the start of the Fed's two-day policy meeting. Investors and markets are watching closely as the Fed weighs possible interest rate cuts—a decision complicated by shifting market conditions and political pressure.
• It’s been about nine months since the last rate cut (prior to Trump's presidency), and “traders are widely expecting that the central bank will lower rates by a quarter point. But Trump himself wants a larger cut as part of what has become an unprecedented pressure campaign.”
  — Kaitlin McCabe [00:34]

Balancing Inflation and Employment

• [01:32] Matt Grossman explains the Fed’s position:
  • Job creation has notably slowed (“fewer than 30,000 new jobs a month”), raising concern on the labor side.
  • Inflation (PCE index) is at about 2.9%, still above the Fed’s 2% target.
  • Most Fed officials see policy as “still on the restrictive side” and aim to move “closer to neutral while probably still leaning a bit on the restrictive side.”
    — Matt Grossman [01:32]

Expectations and the Trump Factor

• [02:25]–[03:22] Kaitlin and Matt discuss market forecasts:

  • Futures markets expect a quarter-point rate cut. Larger cuts seem unlikely given persistent inflation.
  • The precedent: Last September’s (2024) half-point cut was driven by sudden labor market softening.
  • But “most bets are that they’re going to stick with the more normal quarter point cut… especially true given that inflation is still a concern and in fact moving in the wrong direction…”
    — Matt Grossman [02:40]

• [03:33] The Trump administration is pressuring the Fed for a larger cut.

  • Trump has tried to fire Fed Governor Lisa Cook and publicly criticized Jerome Powell and the Fed's new headquarters renovation.
  • “Perhaps a cut will assuage Trump a little bit this week. On the other hand, Trump posted on social media just on Monday morning that Powell must cut interest rates now and bigger than he had in mind…”
    — Matt Grossman [03:33]

Board Dynamics and Decision-Making

• [04:21] The addition of Trump appointee Stephen Myron to the Fed board (confirmed the night before) introduces uncertainty:
  • He’s “just one vote out of a 12-person committee,” but could dissent and call for a half-point cut (“He might be alone… could be joined by… Governor Michelle Bowman… [or] Christopher Waller.”)
    — Matt Grossman [04:29]

Looking Forward: The Dot Plot

• [05:18] This meeting will produce not just a rate change but also updated projections (“dot plot”).
• “[People] will really be looking at that dot plot to see does the Fed think we’re going to get another interest rate cut later this year, two more cuts, and what’s next year going to look like?”
  — Matt Grossman [05:59]

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Global Flashpoints and White House Initiatives

Israel’s Gaza Offensive

• [06:09] Israeli ground forces enter Gaza City with intense bombardment, following a meeting between PM Netanyahu and U.S. Secretary of State Marco Rubio.
• Netanyahu has called Gaza the “last important stronghold of Hamas.”
• Rubio pushes for ceasefire, but “leaves Israel yesterday with a pessimistic outlook as Netanyahu now moves to end the war against Hamas with military force instead of diplomacy.”
  — Kaitlin McCabe [06:09]

U.S. Drug Interdiction at Sea

• [06:55] U.S. Navy strikes a boat believed to be carrying narcotics, killing three.
• When asked for proof drugs were on board, Trump asserts:
  “Well, we have proof. All you have to do is look at the cargo that was like, it spattered all over the ocean, big bags of cocaine and Fenton [fentanyl] all over the place… Plus, we have recorded evidence that they were leaving. We've recorded them.”
  — Donald Trump [07:13]
• Reporter notes: Video shared by Trump revealed no visible drugs; experts question narrative on Venezuelan fentanyl smuggling.

Political Division After Charlie Kirk Shooting

• [08:11] White House Deputy Chief of Staff Stephen Miller promises sweeping actions against “left wing groups promoting violence”:
  “With God as my witness, we are going to use every resource we have… to identify, disrupt, dismantle and destroy these networks and make America safe again for the American people. It will happen and we will do it in Charlie’s name.”
  — Stephen Miller [08:11]

• Vice President J.D. Vance encourages public reporting of comments celebrating Kirk’s death:
  “So when you see someone celebrating Charlie’s murder, call them out in hell. Call their employer.”
  — J.D. Vance [09:05]

• Consequences: Multiple workers fired for online posts about shooting; charges against the accused shooter pending.

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Markets & Business Updates

Google’s $6 Billion UK Investment

• [10:10] Google plans over $6B in UK investments (AI, energy, R&D, training), generating 8,000 jobs/year.
• Reflects U.S. tech sector expansion in Europe, paralleling moves by Oracle, Microsoft, Amazon.

BLS Hiring Freeze Lifted

• The Bureau of Labor Statistics is hiring again after a freeze hampered inflation data gathering.
• Erica McIntarfer, ex-BLS head (fired by Trump in August), to give her first public remarks.

Streaming TV Advertising Revolution

• Media giants Comcast and Roku are rolling out AI-driven, self-serve ad tools, aimed at enabling “mom and pop” businesses to create streaming TV ads.

• “[Small companies] can say here’s a picture of the shirt that we want to sell and the AI will create a 15 second video ad for them in a couple of minutes, free of charge.”
  — Patrick Coffey [11:43]

• Ad spending on these platforms is projected to outpace traditional cable by 2026.

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Notable Quotes & Moments

• “[The Fed is] trying to balance inflation and unemployment and lately they’ve been in a tough corner because those have been both moving in the wrong direction.”
  — Matt Grossman [01:32]

• “Trump posted on social media just on Monday morning that Powell must cut interest rates now and bigger than he had in mind, which suggests that Trump wants to see more than just that quarter point cut this week.”
  — Matt Grossman [03:33]

• “With God as my witness, we are going to use every resource we have… to identify, disrupt, dismantle and destroy these networks and make America safe again for the American people. It will happen and we will do it in Charlie’s name.”
  — Stephen Miller [08:11]

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Timestamps for Key Segments

• 00:18 – Top stories and Fed meeting introduction
• 01:32 – Matt Grossman on labor market, inflation, Fed outlook
• 02:40 – Rate cut expectations and recent precedent
• 03:33 – Political pressure from Trump on the Fed
• 04:29 – New Trump-appointed board member’s potential impact
• 05:18 – What the Fed’s “dot plot” will reveal
• 06:09 – Israel-Gaza military escalation
• 06:55 – U.S. naval strike against alleged drug traffickers
• 08:11 – Miller and Vance on political fallout from Kirk shooting
• 10:10 – Google’s UK investment and BLS staffing
• 11:43 – Comcast/Roku AI-driven streaming TV ads

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This episode offers a high-level yet nuanced snapshot of the tension between monetary policy, political influence, and global events shaping markets and institutions in September 2025.

Transcript

[Goldman Sachs Markets Podcast Host]

What's driving the markets this week? What's on investors minds as they look ahead? Find out in 10 minutes or less on the Markets podcast from Goldman Sachs. Listen.

[Matt Grossman]

Now.

[Kaitlin McCabe]

The year's most pivotal Federal Reserve meeting kicks off. Plus, the US Strikes another boat in its push against drug trafficking, killing three people.

[Donald Trump]

We're telling the cartels right now we're going to be stopping them too. When they come by land. We're going to be stopping them the same way we stop the boats.

[Kaitlin McCabe]

And Israel launches a long anticipated ground offensive into Gaza city. It's Tuesday, September 16th. I'm Kaitlin McCabe for the Wall Street Journal and here is the AM edition of what's News, the top headlines and business stories moving your world today. The Federal Reserve's two day policy meeting kicks off today and investors are on pins and needles. Overnight, an appeals court rejected President Trump's request to immediately remove Governor Lisa Cook from the board while the Senate confirmed Trump's appointee Stephen Miron. At the same time, it's been roughly nine months since the Fed last cut interest rates. That's before President Trump took office. And traders are widely expecting that the central bank will lower rates by a quarter point. But Trump himself wants a larger cut as part of what has become an unprecedented pressure campaign. Economics reporter Matt Grossman is here to unpack it all. Matt, I think it's safe to say that this is the most pivotal Fed meeting so far this year.

[Matt Grossman]

So the Fed is always trying to balance inflation and unemployment and lately they've been in a tough corner because those have been both moving in the wrong direction. The job market is weakening. In the last few months, we've seen an average of fewer than 30,000 new jobs a month, which is a much slower pace than earlier in the year. So that's been a growing concern for them. And on the infl, most estimates think that their preferred inflation gauge, which is called PCE inflation, is going to come in at about 2.9% through August, which is quite a bit higher than the 2% target. Most of the Fed officials think that their rate setting is still on the restrictive side. So the forecast that they will probably cut rates reflects that they want to get a little bit closer to neutral while probably still leaning a bit on the restrictive side.

[Kaitlin McCabe]

Yeah, that's really interesting. It's been kind of a delicate balancing act for them. Looking at futures markets, they show that traders are expecting a quarter percentage point cut. But what are folks out there saying about the likelihood that the central bank could go bigger?

[Matt Grossman]

A lot of that thinking goes back a year ago when the Fed did its first interest rate cut of 2024 in September and they opted for a half point cut at that meeting. The labor market last year looked pretty strong through the first several months of the year, then weakened. Dramat and the Fed felt that it had to catch up a bit when it actually came time to cut this year, it's actually followed quite a similar pattern where it's just in the last few months that the labor market has slowed down pretty significantly. As you mentioned, most bets are that they're going to stick with the more normal quarter point cut. And I think that's especially true given that inflation is still a concern and in fact moving in the wrong direction in the past couple months.

[Kaitlin McCabe]

Matt, if the Fed does cut rates by a quarter point rather than that larger half point cut, where does that leave the institution and especially Chair Jerome Powell in terms of his standing with President Trump?

[Matt Grossman]

Yeah, there's still a lot of pressure on the Fed coming from the White House on multiple fronts. We have the litigation around Lisa Cook and whether she'll be allowed to stay on the Fed's board after the President tried to fire her, accusing her of mortgage fraud. It feels like an eternity ago, but it was really just a few weeks ago that the President was making the expensive renovation of the Fed's headquarters a pertinent issue as he tried to argue that Jerome Powell hadn't been doing his job. Well. Perhaps a cut will assuage Trump a little bit this week. On the other hand, Trump posted on social media just on Monday morning that Powell must cut interest rates now and bigger than he had in mind, which suggests that Trump wants to see more than just that quarter point cut this week.

[Kaitlin McCabe]

Another interesting wrinkle to all of this is Trump appointee Stephen Myron. He was confirmed to join the Fed board last night. How might this affect this week's decision?

[Matt Grossman]

Well, he's just one vote out of a 12 person committee that votes, so his ability to change the direction of the decision is probably limited. On the other hand, he could be one of the voters or perhaps the only voter who dissents against the majority opinion. If the Fed does go ahead with a quarter point cut, Myron could raise his hand and say, actually, I think we should have cut by half a point. He might be alone in making a vote like that. He could be joined by one of the other Trump appointees on the committee, most especially Governor Michelle Bowman, but also perhaps Governor Christopher Waller, who at times have both argued that the Fed should be moving faster to cut rates.

[Kaitlin McCabe]

So some uncertainty around this week's decision, and I guess even more so for the rest of the year.

[Matt Grossman]

Yeah. So this is one of the meetings where the Fed doesn't just make an interest rate decision, but they also outline their projections for the rest of the year in what people call the dot plot, where they post their guesses for where interest rates are going to move next in this chart, and we'll see a new version of that chart on Wednesday. And, and that's especially important because the Wednesday interest rate cut is widely expected, but there's a lot less consensus around as what the central bank's going to do over the rest of the year. So people will really be looking at that dot plot to see does the Fed think we're going to get another interest rate cut later this year, two more cuts, and what's next year going to look like?

[Kaitlin McCabe]

Matt, super interesting. Thank you so much for joining us.

[Matt Grossman]

Thanks for having me.

[Kaitlin McCabe]

Israel has kicked off its long anticipated ground offensive into Gaza City this morning with a heavy bombardment of the populous area. Hundreds of thousands of Palestinians are believed to still be sheltering in the city, which Israeli Prime Minister Benjamin Netanyahu has called, quote, the last important stronghold of Hamas. The ground operation began shortly after Netanyahu met with Secretary of State Marco Rubio, who is pushing for a ceasefire to end the war and release the remaining remaining hostages. Rubio left Israel yesterday with a pessimistic outlook as Netanyahu now moves to end the war against Hamas with military force instead of diplomacy. The US Military attacked a boat in international waters yesterday that was allegedly transporting illegal narcotics to the US Killing three people. It's the second time this month that the US has struck a vessel, marking an escalation of Trump's campaign to crack down on what he has described as, quote, violent drug trafficking, cartels and narco terrorists, unquote. When asked yesterday if he would provide proof that those killed were transporting drugs to the U.S. trump had this to say.

[Donald Trump]

Well, we have proof. All you have to do is look at the cargo that was like, it spattered all over the ocean, big bags of cocaine and Fenton all over the place. And it was. Plus, we have recorded evidence that they were leaving. We've recorded them.

[Kaitlin McCabe]

Trump posted a video of the attack on social media yesterday. There were no drugs visible in the ocean in the footage that was released. Venezuelan drug gangs don't produce or smuggle fentanyl, experts say. Venezuelan leader Nicolas Maduro has condemned the administration's first attack, casting doubt on any intelligence that the targeted boat was carrying drugs. Meanwhile, the White House is moving quickly to turn support for conservative activist Charlie Kirk into political momentum, with President Trump's advisors weighing a range of executive actions that would target liberal organizations. This includes reviewing the tax exempt status of left leaning nonprofit groups and targeting them with anti corruption laws, as well as identifying groups suspected of targeting conservatives or their causes.

[Stephen Miller]

With God as my witness, we are going to use every resource we have at the Department of Justice, Homeland Security and throughout this government to identify, disrupt, dismantle and destroy these networks and make America safe again for the American people. It will happen and we will do it in Charlie's name.

[Kaitlin McCabe]

That's White House Deputy Chief of Staff Stephen Miller speaking with Vice President J.D. vance yesterday about what he described as left wing groups promoting violence, while Vance hosted an episode of Kirk's podcast, the Charlie Kirk Show. Kirk shooting last week has sown deeper political divisions into an already divided nation. Workers across the country who have derided or gloated about Kirk's death online have quickly learned their words can get them fired. With companies and organizations ranging from American Airlines to the Carolina Panthers ousting or suspending staff in recent days, online activists and some prominent conservatives are among those that have flagged the post to employers. Here's Vice President Vance so when you.

[Stephen Miller]

See someone celebrating Charlie's murder, call them out in hell. Call their employer.

[Kaitlin McCabe]

Charges against Charlie Kirk suspected shooter Tyler Robinson are expected to be announced at a press conference at 2pm Eastern today. Coming up, the rest of the day's news, including how Google is investing billions into the UK and how new tech is giving mom and pop businesses the ability to break up your favorite TV shows with targeted ads. Those stories after the break.

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[Kaitlin McCabe]

Tech giant Google is investing over $6 billion in the UK over the next two years. The investment covers AI, energy capacity, training and research and development and would add more than 8,000 jobs a year at businesses across the UK. Google is the latest American giant to announce a large scale investment in Europe, joining others like Oracle, Microsoft and Amazon. It comes as President Trump is set to land in the UK later today kicking off his second state visit. And the Bureau of Labor Statistics is likely breathing a sigh of relief after the agency obtained an exemption to a federal hiring freeze. The BLS has posted job openings for more than two dozen part time workers spread across the country who will collect data for the US A shortage of such workers over the past several months has forced the BLS to cut back on collecting the price data that backs inflation stats. The news comes as former BLS head Erica McIntarfer is expected to give her first public remarks since President Trump fired her in August. And finally, with fall TV season kicking off this week, you might be relishing your ad free streaming service, but media giants Comcast and Roku are looking to upend that by making TV commercials look a lot like the ads in your Instagram and TikTok feeds and crucially affordable for mom and pop businesses. Journal reporter Patrick Coffey says the companies are rolling out AI tools and self service platforms to reshape the ad market and hopefully lure ad dollars back from big tech.

[Patrick Coffey]

The thesis and the hope is that thousands, if not millions of businesses that would never have run ads on traditional, broad or cable TV will now be producing and airing campaigns on streaming TV with the help of AI. Comcast next week will release a platform where a small company can say here's a picture of the shirt that we want to sell and the AI will create a 15 second video ad for them in a couple of minutes, free of charge.

[Kaitlin McCabe]

Research firm Emarketer says traditional cable ad spending in the US will fall 15.5% this year, whereas spending for these types of ads will grow 13.2% and are expected to surpass traditional TV ad spending by 2020. And that's it for what's news for this Tuesday morning. Today's show is produced by Kate Bullivant and Rema McKenna. Our supervising producer is Sandra Kilhoff and I'm Caitlin McCabe for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.