This market commentary has been extracted from CPM Group’s 4 September 2025 Precious Metals Advisory, written before the 17 September FOMC meeting. We would like to thank Silvercorp Metals for making this paid CPM research available free of charge.
The market consensus is overwhelmingly that the Fed will reduce interest rates during the balance of this year, beginning in September. The Fed’s own last projections, released in June 2025, suggest two 25 basis points (bps) rate cuts in the final four months. The markets are pricing two 25 bps rate cuts with one projected for September and the other in December.
While the markets and the Fed seem aligned on the number of cuts for the balance of 2025, there could be a difference in the timing of the rate cuts. Additionally, the wisdom of cutting rates at this time is not assured.
The Fed itself has expressed an array of reservations, pointing to still present inflationary pressures, relatively strong economic performance in a number of segments of the U.S. economy, and the likely inflationary consequences of the Trump Administration’s tariff, immigration, and other policies. Some of these policies carry both inflationary and recessionary pressures, complicating decision making for the Fed’s policy makers as well as everyone else in the world… including precious metals investors and commercial enterprises.
The Fed may pull forward or delay one of its rate cuts depending on the incoming data that gets released over the next couple of months. If there are growing signs of economic weakness and a more pronounced slowdown in labor market conditions, it could prompt the Fed to adhere to the September and December anticipated schedule or even pull forward its two rate cuts.
Matters are complicated for the Fed by the stickiness of inflation and the possibility that inflation could start to tick higher once the effects of tariffs start to be felt more fully in the economy. This scenario could cause the Fed to delay rate cuts, if economic or labor market conditions do not deteriorate significantly.
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“This CPM Group Market Commentary was produced for Silvercorp, one of the premier silver mining companies. We would like to thank Silvercorp for making this paid CPM Group research available free of charge.
Silvercorp offers investors exposure to silver production through its enhanced leverage to the metal. The Company’s mines have been consistently profitable, further bolstered by rising silver prices.”
