Here's why the Fed might cut by 50 bps at next week's meeting

Key points:

South Korean Foreign Minister Cho Hyun has urged the U.S. Congress to support a new visa for his country's businesses, as hundreds of mainly Korean workers arrested during a massive U.S. immigration raid last week were set to return home on Friday.During his meetings with U.S. senators in Washington, Cho reiterated concerns among South Koreans over the detention of Korean professionals participating in investment projects in the United States, his ministry said in a statement.

A plane carrying more than 300 Korean workers who were detained during the raid at a Hyundai Motorand LG Energy Solutionbattery joint venture in the state of Georgia has left the United States, bound for South Korea.The plane is expected to touch down in South Korea at around 2 p.m. (0500 GMT), according to LG Energy Solution, whose workers and subcontractors were among the detainees.After being held for a week by U.S. Immigration and Customs Enforcement, the South Korean workers have been released and flown from Atlanta.

The raid that sent shockwaves across South Korea has threatened to destabilise ties, at a time when both countries are seeking to finalise a trade deal, and to scare off South Korean investment in the United States that U.S. PresidentDonald Trumphas been keen to secure.Following the raid, the battery plant is facing a minimum startup delay of two to three months, Hyundai CEO Jose Munoz said on Thursday.In the wake of the raid, Washington and Seoul have agreed to discuss establishing a new visa category for South Koreans, Cho has said.U.S. Commerce Secretary Howard Lutnick said on Thursday that hundreds of South Korean workers arrested during the immigration raid had the wrong visas.

"I called up the Koreans, I said, oh, give me a break. Get the right visa and if you're having problems getting the right visa, call me," Lutnick said in an interview with Axios.Asked if the raid had created tensions between the countries, Lutnick told CNBC Trump would "go and address that."

"So I think he's going to make a deal with different countries that when they want to build big here, he'll find a way to get their workers proper work visas, meaning short-term work visas, train Americans and then head home," he said.South Korean companies have complained for years that they have struggled to obtain short-term work visas for specialists needed at their high-tech U.S. plants, and had come to rely on a grey zone of looser interpretation of visa rules under previous U.S. administrations."Minister Cho emphasized that fundamental preventative measures are essential to ensure that our workforce is not subjected to unfair treatment in order to fulfil our companies' investment commitments to the United States," the ministry said in a statement.

Source: TradingView

Spain sees hosting talks between the United States and China in the coming days as a chance to repair ties with Donald Trump's government, days after Washington described its plan to impede arms sales to Israel as "emboldening terrorists".

Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng chose Madrid as the venue to continue their discussions, and a government source said Spain would make use of that opportunity.

The U.S. on Tuesday said measures announced by Prime Minister Pedro Sanchez to limit access to Spanish ports and airspace for ships and planes carrying weapons for Israel were "deeply concerning" because they might limit U.S. operations.

Under an agreement signed in 1953, the U.S. military has used the Morón air base and the Rota naval base, both in southern Spain, for more than 70 years.

Sanchez also angered Washington when he said Spain would not meet demands for NATO members to raise defence spending to 5% of gross domestic product, prompting Trump to threaten to raise tariffs against Spain.

As Spain's ties with the U.S. have deteriorated, its relations with China have warmed.

Sanchez has visited China three times in as many years, and switched his vote to abstain on whether the EU should apply tariffs to Chinese EVs, having supported them, as he seeks to position Spain as an interlocutor between China and the EU.

That the U.S. was able to use Spain's military bases for refuelling during its bombing of Iranian nuclear sites in June shows that Spain never overstepped the line and that its transatlantic relationship remains intact, said José-Ignacio Torreblanca, senior adviser to the Madrid office of the European Council on Foreign Relations.

"We do not yet know who requested it (Spain hosting the meeting) - whether it was the Chinese - but it is good for Spain," Torreblanca said. He added that Spain's government would get the opportunity to speak with Bessent and discuss its concerns, and this would give Madrid "an advantage" in future negotiations with Washington.

Source: TradingView

Source: Theguardian

The line chart shows the debt-to-GDP ratios for G7 countries with forecasts from 2025 highlighted using dashed lines. The ratio for Germany, U.S., Britain, France and Italy is projected to rise.

30-year bond yields, which reflect nations' long-term nominal borrowing costs, are high and rising everywhere from Canada to Japan

European stock markets in Germany, France and region wide have lagged world equities since the start of the summer

Relationship between total returns of iShares 20+ year Treasuries ETF and equity sectors. higher long-term bond yields boost lenders over tech.

Japanese investments in overseas assets in billion JPY

Source: reuters

The gold market is trading higher ahead of the weekend after the latest data showed consumer sentiment in the U.S. declining more than expected, while inflation expectations rose higher once again.

The University of Michigan announced on Friday that the preliminary reading of its Consumer Sentiment survey for August was 55.4. The data was well below expectations, as the consensus forecast of economists called for a reading of 58, and was also lower than August’s final reading of 58.2.

“Consumer sentiment moved down less than three index points in early September,” said Surveys of Consumers Director Joanne Hsu. “This month’s easing in economic views was particularly strong among lower and middle income consumers.”

Gold prices traded higher following the 10 am EDT data release, with spot gold last trading at $3,653.13 per ounce for a gain of 0.52% on the day.

The components of the September index showed declines in most areas, with longer-run inflation expectations rising and most areas of consumer spending reflecting the impact of high prices.

“Buying conditions for durables improved, while all other index components fell,” Hsu noted. “Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, labor markets, and inflation. Likewise, consumers perceive risks to their pocketbooks as well; current and expected personal finances both eased about 8% this month.”

The report said that trade policy remains “highly salient” to consumers, with about 60% “providing unprompted comments about tariffs during interviews,” a similar number as in August. “Still, sentiment remains above April and May 2025 readings, immediately after the initial announcement of reciprocal tariffs.”

The inflation picture continued to deteriorate, with year-ahead inflation expectations holding steady at 4.8% while long-run inflation expectations moved up for the second straight month to 3.9% in September. “This current reading is considerably lower than the 4.4% seen in April,” Hsu said.

Source: Kitco