Tonight’s FOMC｜I originally bet on “no rate hike,” but now I’ve changed my mind!
Honestly, I started out on the “keep rates unchanged” side.
Recently, the CPI and PPI have looked scary at first glance, but once you break them down, the biggest driver is Middle East fighting pushing up oil prices. That’s a supply-side issue. The Fed’s rate-cutting blade can’t cut through a battlefield. Once the conflict calms down, energy inflation will cool off on its own.
Plus, the election is right around the corner. If rates are hiked, mortgage payments, auto loans, and even groceries will all jump—regular people will immediately start cursing.
History also tells us this: before elections, the Fed basically plays dead. If they can delay, they absolutely delay—never start a fresh rate-hike cycle at this exact moment.
And U.S. Treasury yields are already flying high. If they add another push, global bond markets will have to shake three times. Who will cover cross-border financial risk? The Fed doesn’t want to take the blame for that either.
But！！！reality just slapped me in the face 🖐🏻
The CME FedWatch now has the probability of tonight’s 25bp hike at 92.4%.
If they really don’t hike tonight, the market’s first reaction will be—wait, did you get captured by the election? The little bit of credibility you built after taking office would evaporate on the spot.
Trump keeps shouting about rate cuts outside. Political pressure is definitely real. But for Powell, the words “Fed independence” matter more than anything. It cannot be nailed to the disgraceful pillar of being a “political puppet.”
So！！！
The most likely script tonight: a dovish “insurance” hike.
Hiking 25bp will meet market expectations, but will Powell’s press conference say something like “we still need to hike more within the year”? There won’t be a clear forward path—no promises and no sweet talk. Everything after that will depend on the data.
In plain human terms: this is a one-time protection fee, not the start of a new round of rate-hike cycle.
For risk assets and U.S. stocks, once tonight’s rate-hike headwind lands, the next phase is the beginning of a new round of asset repair.
After this move—
✅ Market expectations met
✅ Fed’s face is saved
✅ Asset prices won’t be hammered to pieces
❌ Trump: and what about me？？？
After it’s done, Powell will probably privately swing by with a bottle of ice-cold cola and bring a few beauties to apologize 😂
Powell’s inner OS: This chair is not a job that a normal person should do—neither left nor right.
⚠️ Just my random talk—doesn’t constitute any investment advice.
$BTC
$ETH
$XAUT
Honestly, I started out on the “keep rates unchanged” side.
Recently, the CPI and PPI have looked scary at first glance, but once you break them down, the biggest driver is Middle East fighting pushing up oil prices. That’s a supply-side issue. The Fed’s rate-cutting blade can’t cut through a battlefield. Once the conflict calms down, energy inflation will cool off on its own.
Plus, the election is right around the corner. If rates are hiked, mortgage payments, auto loans, and even groceries will all jump—regular people will immediately start cursing.
History also tells us this: before elections, the Fed basically plays dead. If they can delay, they absolutely delay—never start a fresh rate-hike cycle at this exact moment.
And U.S. Treasury yields are already flying high. If they add another push, global bond markets will have to shake three times. Who will cover cross-border financial risk? The Fed doesn’t want to take the blame for that either.
But！！！reality just slapped me in the face 🖐🏻
The CME FedWatch now has the probability of tonight’s 25bp hike at 92.4%.
If they really don’t hike tonight, the market’s first reaction will be—wait, did you get captured by the election? The little bit of credibility you built after taking office would evaporate on the spot.
Trump keeps shouting about rate cuts outside. Political pressure is definitely real. But for Powell, the words “Fed independence” matter more than anything. It cannot be nailed to the disgraceful pillar of being a “political puppet.”
So！！！
The most likely script tonight: a dovish “insurance” hike.
Hiking 25bp will meet market expectations, but will Powell’s press conference say something like “we still need to hike more within the year”? There won’t be a clear forward path—no promises and no sweet talk. Everything after that will depend on the data.
In plain human terms: this is a one-time protection fee, not the start of a new round of rate-hike cycle.
For risk assets and U.S. stocks, once tonight’s rate-hike headwind lands, the next phase is the beginning of a new round of asset repair.
After this move—
✅ Market expectations met
✅ Fed’s face is saved
✅ Asset prices won’t be hammered to pieces
❌ Trump: and what about me？？？
After it’s done, Powell will probably privately swing by with a bottle of ice-cold cola and bring a few beauties to apologize 😂
Powell’s inner OS: This chair is not a job that a normal person should do—neither left nor right.
⚠️ Just my random talk—doesn’t constitute any investment advice.
$BTC
$ETH
$XAUT