Two hours remaining until the U.S. Federal Reserve's interest rate decision
Expectations suggest that a cut is unlikely,
therefore keeping the interest rate is the most probable today.
However, all focus is on Powell's speech.
Why is Powell's speech more important than the decision?
1. ✅ The decision is already known (to hold rates).
❗ But the direction of monetary policy is unclear, and the markets need official confirmation on:
Is a cut coming this year?
Or will the Fed keep rates high for a longer period to combat inflation?
2. 🎯 Powell's tone directs the market immediately.
If he uses words like "inflationary pressures are still present," the market will react negatively🔻 (💵 the dollar strengthens, gold drops).
Because it indicates that the interest rate will remain unchanged even in the next meeting.
And if he hints at "clear progress towards the inflation goal," it is understood as a hint towards a forthcoming cut (🟢↗️ gold and stocks rise, 💵 the dollar weakens).
🧠 The market reads between the lines:
Powell's speech is not viewed as an "official statement," but is analyzed at the level of words, phrases, and tone.
Every hint, repetition, or omission of a certain word can move markets by billions of dollars within minutes.$BTC
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