🚨🚨Fed Holds. Markets Hope. But for How Long?

On May 7, 2025, the Federal Reserve kept its benchmark rate steady at 4.50%, marking another pause in its tightening cycle. No surprise — but the narrative behind the pause is anything but calm.

The official FOMC statement paints a mixed picture:

• Economic activity is still expanding steadily

• Unemployment remains low and stable

• Inflation? Still elevated

• Uncertainty? Even higher than before

• QT (Quantitative Tightening)? Still on — $5B/month

Translation? The Fed is walking a tightrope between overheating and recession. And the pressure is mounting.

Yet traders remain defiant — still pricing in three rate cuts in 2025, with the first one expected by July. The market continues to believe that softer inflation prints or labor cracks will force the Fed’s hand. But Jerome Powell’s team is sending a different signal: they’re not in a rush.

What does this mean for risk assets?

• Crypto: Still buoyant, betting on liquidity returning by Q3

• Equities: Choppy, with tech showing resilience

• Dollar: Slightly weaker, as rate cut bets build

• Gold & Bitcoin: Benefiting from hedging demand in uncertain macro

But here’s the twist:

The Fed’s “data dependency” doctrine means the next CPI or jobs report could shift everything. One hot print, and the cuts get pushed. One miss, and July is game on.

To the #AMAGE community:

Is the market getting ahead of itself — or is the Fed underestimating the economic brakes already in motion?