The Federal Reserve is likely to downsize its rate cuts to 25 basis points at both the November and December policy meetings, according to Aichi Amemiya at Nomura Securities International.

Why it matters: For now it looks likely that the U.S. economy could avoid a recession as inflation plunges and the labor market remains healthy. Powell signaled that lower rates could help guarantee a so-called "soft landing," but cautioned that some risks remain.

Federal Reserve Chair Jerome Powell has signaled that more rate cuts are in the pipeline, though their size and speed will depend on the evolution of the economy.