By Felipe Barragán, Expert Research Strategist at Pepperstone

 September 18, 2025 –

“Yesterday revolved around the Federal Reserve. The Fed kicked off an easing cycle with a 25 bp cut to 4.00%–4.25%, framing it as a risk-management step amid a softer labor market and lingering—but ebbing—inflation pressures. The dot plot and Powell’s tone pointed to a “steady, not sprint” approach; most officials penciled in more reductions by year-end, while Governor Stephen Miran dissented in favor of a larger move.

Overall the message was one of gradualism, tied to a labor market that is softening at the edges and inflation that, while easing, remains sticky. That balance—between signaling more cuts ahead and stressing data dependency—has kept investors cautiously optimistic but wary of overextending into risk. As a result main Wall Street indices emerged largely unshaken from the Fed´s decision with some “sell the news” behavior seen post meeting.

Rates and FX: if the Fed proceeds cautiously and inflation continues to trend toward target, term premia should stay anchored and curve-steepening impulses may remain contained—supportive for duration-sensitive assets but less so for pure “reflation” trades. Near-term dollar direction hinges on relative policy paths: today’s guidance leans dollar-negative at the margin, but the greenback still gets intermittent support from U.S. growth resilience and safe-haven demand.

Commodities split along with their own storylines. Gold took a breather after making fresh all-time highs into the decision; however, flows into ETFs and a powerful central-bank bid remain the medium-term backbone of the move, and several analysts have nudged longer-dated targets higher. Oil was down as the market weighed near-term disruption risks from strikes on Russian energy infrastructure against a heavier balance in 2025 signaled by recent agency projections. In practice, that sets up a tug-of-war: geopolitical headline risk props up prompt spreads, while improving non-OPEC supply and the prospect of softer global demand cap sustained rallies unless outages escalate.

LatAm in focus. Mexico’s peso extended its recent firm tone into yesterday’s morning as local markets reopened after the Independence Day holiday, reflecting carry appeal and the global dollar backdrop ahead of the Fed. The day’s narrative was less about spot ticks and more about whether a gentler Fed sustains favorable funding conditions—near-term it does, provided risk appetite holds.

In Chile, a shortened pre-Fiestas Patrias session saw the IPSA ease on index-rebalance flows, with the market set to price U.S. outcomes only next week. As for FX, the local dollar’s broader September drift has tracked the global dollar and copper dynamics; with tariffs and policy noise still coloring copper’s medium-term story, CLP volatility remains tied to headlines as much as to fundamentals.”