The Fed cut rates by 25 basis points today, as expected. But what matters is the signal for policy beyond today. Chair Powell struck the tone of a pilot trying to land a plane in thick fog, which is why he stopped well short of committing to another cut in December, or even expressing a presumptive path for easier policy beyond December.

So the question is: why? For one, the fed is operating in a data desert due to the shutdown. Buying time offers more visibility. And second, the FOMC is split. It's split on the balance of risks to meeting its dual mandate. Yes, job gains have slowed, but they've slowed due to factors outside the Fed's control. The decline in labor supply.

Meanwhile, inflation remains high and potentially sticky, with growth at or above trend ongoing inflation passed through from tariffs and loose fiscal policy. The bottom line, today's rate cut was a close call. Closer than almost anyone appreciated. This is a Fed that sees two-sided risks to its mandate, and it wants to feel its way towards neutral on its own terms.

So what's our call? With the policy rate still at restrictive levels, we see further easing, but the pace is going to be slower. Our call is for 75 basis points of further cuts through next May, when Chair Powell’s term ends. After May, when Chair Powell leaves the scene, all bets are off and the policy rate will probably lurch much lower.