🟢 The Fall of Powell's Microphone: The Speech That Could Shake Q4 || Detailed Publication
Jerome Powell is set to speak today, and traders around the world are tuned in. This is not just another Fed speech; it is the blueprint of where the markets are heading into the fourth quarter.
The Current Scenario and the Roadmap 🗺️
The Fed has just made its first rate cut of 2025, lowering by 25 basis points to bring the range to 4.00–4.25%. This ended a long pause that began in December 2024. The Fed's "dot plot" now projects that rates will slide to around 3.6% by the end of 2025, with two more cuts likely this year.
Two Possible Paths for the Market 👇
The market faces a crucial question: was the first cut the beginning of a easing cycle or just a risk management measure? Powell's answer today will dictate the direction:
If he leans towards a dovish tone: risk assets soar, stocks rise, the dollar weakens, and bond yields fall.
If he remains cautious: markets cool off, yields hold steady, and the dollar retains its strength.
Powell's dilemma is classic: cutting too much could reignite inflation, while keeping rates too high could stifle employment and growth. The tone he adopts today could light the fuse for a rally in the fourth quarter or tighten the leash on the markets.
This speech is the market's compass: ignore it at your own risk.