Double mandate

Yesterday’s 50 basis point rate cut by the Federal Reserve serves as a reminder of the central bank’s dual mandate, unlike the ECB's singular focus on inflation. The Fed is tasked with managing both inflation and employment, and it was likely concerns over the latter that prompted a more aggressive cut than most analysts expected. If the Fed's primary worry is a softening job market, the key risk for investors is that the much-anticipated soft landing for the U.S. economy could instead turn into a hard landing, bringing the threat of recession back into focus. It's crucial for us to stay highly vigilant in the coming months.