9-23-25: The Case for More Interest Rate Cuts in 2025

by Louis Navellier

September 23, 2025

In this week of Fed hints, rumors and conflicting views, we’ll hear from no fewer than TEN Fed officials speaking this week, so we will likely get a better idea of future key interest rate cuts. In the meantime, Minneapolis Fed’s Neel Kashkari published an essay which said that the labor market “appears to be weakening” and “nominal wage growth continues to moderate.” Kashkari also said that inflation remains high, but inflation expectations haven’t risen, as expected. In conclusion, Kashkari said, “I do not believe we should be on a preset course for a series of rate cuts.” So clearly Kashkari is one of the Fed’s hawks.

The biggest economic case for rate cuts is the weak housing market, which is hamstrung by stubbornly high mortgage rates. The Commerce Department reported last Wednesday that new housing starts declined to a 1.307-million annual pace in August, down substantially from a revised 1.429-million annual pace in July. Economists were expecting housing starts to reflect a 1.37-million pace in August, so the drop was much bigger than expected. Also notable is that building permits declined to a 1.312-million annual pace in August, down from a revised 1.362-million annual pace in July. Clearly, the housing industry needs the Fed to cut interest rates substantially – just to help the housing market recover.

One reason the Fed only cut key interest rates by 0.25% last week is that the Commerce Department reported last Tuesday (as the Fed met) that retail sales rose 0.6% in August, substantially higher than the economists’ consensus estimate of a 0.3% increase. Excluding vehicle sales, retail sales rose by an even more impressive 0.7% in August. Online sales surged 2% in August. Back-to-school sales apparently boosted clothing & accessories 1% in August, as well as sporting goods, which rose 0.8%. Fully nine of the 13 categories surveyed increased in August, which is a good sign that consumer spending is healthy.

New jobless claims declined to 231,000, down from 264,000 in the previous week, which was the highest level in four years. Economists were expecting 240,000 claims, so this report was better than expected. Existing jobless claims remain high at 1.92-million, roughly equal to 1.93-million in the previous week.

One big surprise last week is that President Trump called for companies to start announcing their sales and earnings every six months, versus the current quarterly announcements cycle. Specifically, Trump said on Truth Social, “Subject to SEC Approval, Companies and Corporations should no longer be ‘Required’ to report on a quarterly basis … but rather on a Six (6) Month Basis.” I suspect this push to bi-annual versus quarterly accounting will get some push-back, since it was entirely unexpected.

Trump Talks with China’s President Xi to Expand Business Opportunities

President Trump talked with Chinese President Xi on Friday. On Truth Social, Trump said “The big Trade Meeting in Europe between The United States of America, and China, has gone VERY WELL!  It will be concluding shortly. A deal was also reached on a ‘certain’ company that young people in our Country very much wanted to save. They will be very happy!”

In other words, Trump and Xi are expected to announce a Tik Tok deal.

In the meantime, China announced that a preliminary investigation found Nvidia violated that country’s antimonopoly law in connection with an acquisition of Mellanox Technologies, an Israeli company that it acquired in 2020. China’s antitrust regulator said the investigation was continuing, and it didn’t elaborate on the alleged violations, or say whether it would punish Nvidia. I suspect that China needs leverage and this Nvidia investigation is part of that leverage; in my opinion any pullback in Nvidia is a great buying opportunity!

Last Thursday, Nvidia announced a $5-billion investment in Intel, in which both companies will custom design and manufacture “multiple generations” of custom chips for data centers and personal computers. Nvidia and Intel are focused “on seamlessly connecting Nvidia and Intel architectures,” using NVLink, its interconnect technology that allows multiple graphics processing units to connect to each other or to central processing units for fast and efficient communication between chips in data centers. The NVLink interconnect helps boost scaling to handle intense AI and high-performance computing workloads. Nvidia’s Jensen Huang said, “This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem … a fusion of two world-class platforms.”

The Financial Times reported that the Cyberspace Administration of China told companies, including ByteDance and Alibaba, to end their testing and orders of the RTX Pro 6000D, Nvidia’s tailor-made product for China. This is expected to provide the leverage that President Xi can utilize to negotiate a better trade deal with the U.S. It will be interesting to see exactly what President Trump announces.

The lidar company I recommend, Hesai (HSAI), recently received a $40 million order for its sensors from a leading U.S. robo-taxi company, which is what I assume is Waymo. Interestingly, Hesai’s co-founder, David Li, said he remained “conservative” about scaling up fully to autonomous vehicles. Recently, there was a fatal crash in a Xiaomi SU7 sedan in China, which caused Chinese regulators to tighten their regulations for self-driving vehicles. Interestingly, Hesai just raised $535 million in a secondary stock offering. The company now dominates lidar sensors and is effectively now a monopoly.

In other overseas news, France continues to implode. Sebastien Lecornu, the new French Prime Minister, is not doing very well in his negotiations with Parliament on a new budget. French unions have launched widespread anti-austerity protests. Lecornu has so far given few indications of any concessions he is willing to make. As Prime Minister, he will need to strike deals with some opposition lawmakers to avoid being ousted, but his consultations with rival groups have, so far, made little progress. In the meantime, Marine Le Pen’s National Rally party retains control over Parliament and is pushing for strategic cuts.

Navellier & Associates; own Nvidia Corp (NVDA), Alphabet Inc. Class A & C (GOOGL), Hesai Group Sponsored ADR (HSAI), and Intel (INTC), in managed accounts.  Louis Navellier and his family own Nvidia Corp (NVDA), and Hesai Group Sponsored ADR (HSAI), via a Navellier managed account and Nvidia Corp (NVDA), in a personal account. They do not own Intel (INTC) or Alphabet Inc. Class A & C (GOOGL), personally.