#FOMCMeeting 📊 Market & Expert Sentiment
Markets overwhelmingly anticipate a hold. CME FedWatch shows nearly 100% odds of no rate change tomorrow .
Market pricing suggests two modest rate cuts later this year—likely in September and December .
Experts caution against hiking now: geopolitical & trade risks have pushed inflation drivers unpredictable—but also emphasize that multiple data points must remain stable before a pivot .
---
🔍 Key Risks & Watchpoints
1. Geopolitical shocks — Rising tensions in the Middle East spiked oil prices, keeping inflation pressure front and center .
2. Trade & tariff uncertainty — Still bubbling; the Fed is wary of upstream inflation from higher import costs .
3. Inflation softening — Core PCE has dipped to around 2.1%–2.5%, which lowers urgency for cuts but also eases pressure to hike .
4. Labor market — Signs of modest cooling, but job gains remain decent—enough for the Fed to maintain a steady stance .
---
🗳️ Likely Outcome: Pause
Expect another rate pause tomorrow, at the current 4.25%–4.50% range. Neither a hike nor a cut fits the current data:
No immediate inflation surge that demands tightening.
But not enough sustained cooling or data confidence to justify easing now.
---
🧭 My Positioning:
Asset allocation: Neutral to modestly defensive in equities—holding core indexes like SPY while trimming cyclical exposures.
Fixed income: Short-duration bond ladders or floating-rate structures to benefit if cuts do happen later this year.
FX outlook: Watch for USD volatility—if the Fed leans dovish, the dollar could give back recent gains.
