The Fed's decision nearly caused a significant fallout with just one vote!

Tonight the FOMC results were announced... and it almost resulted in a minor black swan event..

Previously, Nick mentioned that it might change to a single cut... but the results showed that 7 decided not to cut rates this year... and 8 decided to cut rates twice this year.. So ultimately, the prevailing expectation of two cuts this year matched the market's expectations.. However, it was just one vote away! If one had swayed, and if there had been a tie or a dot plot indicating no cuts this year.. the market would have definitely seen a big drop today.. How people interpret it is another matter, but those doing event quantification would have definitely sold off if they saw a dot plot indicating no cuts this year.. Because it would be worse than the already mentally prepared single cut...

Fortunately, with just one vote, there was no black swan tonight.. but it's also frustrating.. I didn't get to benefit from the low long positions tonight..

Since the announcement of two cuts aligns with market expectations, Powell also doesn't need to soothe the market during his speech.. He maintained his neutral stance, continuing to wait for data..

He also spoke about the current situation in the Middle East; although it may lead to rising inflation, he believes that the inflation caused by rising oil prices is temporary.. Therefore, the current strategy in the Middle East has little impact on medium to long-term inflation..

At the same time, the labor market is still okay, so there isn't an urgent need for rate cuts... The market is currently betting that the chances of rate cuts starting in September are greater..

So, recently there is one less point.. In the next two days, let's see what happens in the Middle East.. If there’s significant development, act accordingly.. If there’s no development, play it safe.