We had Fed day today, and it went just about how everyone expected: a 25 basis point cut. Markets popped, pulled back and closed just a touch down. Nothing shocking there.
But here’s where it gets interesting:
The Fed is talking more about employment now, not just inflation.
Governors are split: 9 expect two more cuts, 2 expect one, 6 expect none.
Meanwhile, CME futures are pricing in an 87.7% chance of another cut.
That doesn’t add up. Why place such heavy weight on just over half the governors’ views? If employment really is weak enough to justify cutting, maybe the Fed should’ve cut more now. If it’s still “wait and see,” maybe no cut would’ve made more sense. The middle ground feels off.
The key number? The unemployment report on the first Friday of next month. That’s the one to watch. Add in the risk of a government shutdown at month’s end, and I think volatility could pick up quickly.
#MarketUpdate #FOMC #InterestRates #VolatilityWatch
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