#thoughts
Next week (May 7), there will be a meeting of the Federal Reserve, where the direction of further monetary policy in the US will be determined.
Despite weak GDP and alarming macro data, the market is currently expecting a pause in the rate.
Market expectations for the rate:
— May 7: Pause
— June 18: Pause
— July 30: Decrease by 25 b.p. to 4.00–4.25%
— September 17: Decrease to 3.75–4.00%
— October 29: Decrease to 3.50–3.75%
— December 10: Pause
Any deviation from these expectations could become a powerful catalyst for the market. The rhetoric of Powell will be very important at the current meeting: what policy the Federal Reserve will adopt.
Meanwhile, Trump is urging the Federal Reserve to lower the rate!
According to him, there is no longer inflation, and it is time for the Federal Reserve to act.
If the Federal Reserve is not in a hurry to ease policy, the economy will remain under pressure.
In the current market, this increases the risk of a correction.
And if the stock market starts to fall, crypto will almost certainly follow.
We do not rule out that in May there may be an official hint at an emergency decrease in June.
