$XAU FOMC Tonight: 92.5% Odds of a 25bp Hike, The Real Question Is "How Many Times?"
At 2:00 AM tomorrow (UTC+8), the FOMC will announce its rate decision and economic projections. Half an hour later, Chair Kevin Warsh will hold a monetary policy press conference.
What's priced in?
Fed funds futures currently price 92.5% odds of a 25bp hike. Nearly certain.
The key isn't whether they hike, it's how many times:
Market focus has shifted from "will they hike" to "how many times." The new dot plot will determine whether this is a one-off adjustment or the start of a new hiking cycle.
Two scenarios:
One or two more small hikes: US equities and Treasuries can likely absorb it
Signals of multiple consecutive hikes: 10-year Treasury yields could stabilize above 5%, volatility in USD and equities will rise
Warsh is in a tough spot: he must balance Trump's calls for low rates against surging long-term Treasury yields.
For crypto, this is the week's most important macro event. If the Fed signals "hawkish" multiple hikes money flows out of risk assets. If "dovish" one hike then pause crypto could benefit from renewed risk-on sentiment.
Worth noting: even though the outcome is largely priced in, market reactions usually come from what Warsh says at the press conference, not the rate number itself.
What do you think will the Fed signal "one and done" or "new hiking cycle"? And how will crypto react?
#FedRateWatch $CL
At 2:00 AM tomorrow (UTC+8), the FOMC will announce its rate decision and economic projections. Half an hour later, Chair Kevin Warsh will hold a monetary policy press conference.
What's priced in?
Fed funds futures currently price 92.5% odds of a 25bp hike. Nearly certain.
The key isn't whether they hike, it's how many times:
Market focus has shifted from "will they hike" to "how many times." The new dot plot will determine whether this is a one-off adjustment or the start of a new hiking cycle.
Two scenarios:
One or two more small hikes: US equities and Treasuries can likely absorb it
Signals of multiple consecutive hikes: 10-year Treasury yields could stabilize above 5%, volatility in USD and equities will rise
Warsh is in a tough spot: he must balance Trump's calls for low rates against surging long-term Treasury yields.
For crypto, this is the week's most important macro event. If the Fed signals "hawkish" multiple hikes money flows out of risk assets. If "dovish" one hike then pause crypto could benefit from renewed risk-on sentiment.
Worth noting: even though the outcome is largely priced in, market reactions usually come from what Warsh says at the press conference, not the rate number itself.
What do you think will the Fed signal "one and done" or "new hiking cycle"? And how will crypto react?
#FedRateWatch $CL
