🚨 — THE FED IS BACK IN FOCUS
The September FOMC meeting is underway, and markets are bracing for a potentially major policy shift. The Fed’s decision is due Wednesday, Sept. 16.
🔥 What markets are pricing:
• Current Fed funds target: 3.50%–3.75%
• Futures are pricing roughly an 87% probability of a 25bp hike to 3.75%–4.00% as of Sept. 14.
• August CPI rose 0.4% MoM, with inflation at 3.4% YoY. Core CPI rose 0.3% MoM and 2.4% YoY.
• Oil above $100/barrel is adding another inflation risk.
• Goldman Sachs, J.P. Morgan and Morgan Stanley have shifted toward a 25bp September hike, with Morgan Stanley also expecting another hike in December.
⚠️ But the real market-moving event may NOT be the hike itself.
The big question is what Kevin Warsh signals next.
A hawkish Fed could mean:
📈 Dollar strength
📈 Treasury yields
📉 Pressure on stocks
📉 Risk assets & crypto volatility
A softer message could trigger the opposite reaction.
With inflation still above the Fed’s 2% target, rising energy prices and markets heavily positioned for a hike, Wednesday could become a major volatility event across global markets.
The rate decision is only the first move.
The real signal will be the Fed’s path forward.
Watch the yields. Watch the dollar. Watch Bitcoin.
Tomorrow could set the tone for the next phase of markets.
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