Bond traders are increasingly expecting at least one half-point rate cut by the Federal Reserve before the end of the year, spurred by a cooling labor market and concerns about economic weakness. While a quarter-point cut is widely expected at the upcoming meeting, notable options and futures trading activity reflects hedging against the possibility of more aggressive easing, particularly around the December policy decision.

Foreign investors are increasingly hedging their exposure to the dollar due to concerns about US President Donald Trump's policies, with Deutsche Bank reporting that hedged investments in US bonds and equities have surpassed unhedged holdings for the first time in four years. The trend has contributed to a more than 10% decline in the dollar this year, even as US stocks have surged, highlighting a shift in investor strategy to mitigate currency risk.

Franklin Templeton anticipates a slowdown in industry consolidation as traditional asset managers struggle to keep pace with rising valuations in the private capital sector. "I think it's hard for anybody who hasn't made their move already because traditional asset managers don't trade at particularly rich multiples," the firm's CEO Jenny Johnson said. "The alternatives managers trade at really, really rich multiples...It's just hard to buy scale if you haven't moved early, like we did."

Institutional investors, including pension funds, hedge funds, and asset managers, are expected to strongly oppose President Donald Trump's proposal to end quarterly earnings reports. Many rely on frequent disclosures to closely monitor company performance and manage risk. Investors argue that quarterly updates are essential for tracking developments and making informed decisions, especially during volatile periods.

The Federal Reserve is expected to cut interest rates by a quarter point Wednesday to support a weakening labor market, marking its first policy shift of the year after tariff-driven inflation concerns kept it on hold. Fresh projections due with the decision are expected to signal one or two more cuts this year, though dissent among policymakers looms. "Every cut is more difficult than the previous cut unless the labor market shows signs of continued deterioration," said Aditya Bhave, senior US economist at Bank of America.

House Republicans plan to combine a bill banning the Federal Reserve from creating a central bank digital currency with the CLARITY Act, which overhauls cryptocurrency regulation, after both bills passed separately in July. The move aims to appease GOP hardliners, but faces challenges in the Senate, where a different market structure bill, the Responsible Financial Innovation Act, is expected to be advanced.

Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries have quickly rejected a short-term government funding plan introduced by Republican leaders, increasing the risk of a government shutdown on October 1. Schumer and Jeffries have criticized the plan for failing to meet the needs of Americans and have urged Republicans to engage in bipartisan negotiations.