The central event will be the FedRes meeting, the results of which we’ll learn on 17 (Wednesday). This meeting is special because, in addition to the rate decision and J. Powell’s press conference, Fed members will also present their updated forecasts on inflation, GDP, unemployment, and the policy rate all the way through 2027. That means the market reaction will not be concentrated in a single moment but will evolve in three waves.
🌊The 1st wave will come with the rate decision itself. Right now, markets are betting on a 0.25% cut, although some analysts don’t rule out a sharper 0.5% move—similar to 2024, when the Fed slashed rates more aggressively after revising labor market data. If the cut ends up being only 0.25%, investors will need an additional bullish trigger to keep buying momentum alive. Otherwise—expect a classic “sell the news” reaction.
🌊 The 2nd wave will depend on the economic projections released by Fed members. Markets currently expect the Fed to reduce rates by a total of 0.75% before the end of 2025 (0.25% at each meeting). But the real intrigue lies in the outlook for 2026. If the Fed pencils in deeper or faster cuts, risk assets such as equities and Bitcoin could get a powerful boost. Investors will be watching every nuance to compare the new dots with the previous ones.
🌊 Finally, the 3rd wave will be set in motion during Powell’s press conference, 30 minutes after the decision. Historically, he has often managed to reverse market sentiment by striking a tougher tone on inflation despite dovish forecasts. Once again, tariffs and inflation risks could become his main talking points.
Bottom line: for markets to continue climbing, Powell needs to signal that the Fed is committed to an easing cycle, not just a one-off rate trim. Traders should prepare for elevated volatility and sharp intraday swings across all risk assets.
This Fed day won’t just be about numbers—it has the potential to reset market sentiment for months ahead.
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