Post #2595

FOMC held the rates, which was already 98% expected, but Powell’s tone shocked the market. He hinted the pause could extend, and called short-term inflation “somewhat elevated.” A clear hawkish signal. 🔻 Result: Sept rate cut odds dropped from 60% → 55%. Bets on 0 rate cuts this year have increased. One of the big reasons for the July market boom was also that POWELL had said in the June FOMC minutes that “THE SOLID MAJORITY AT THE FED ARE EXPECTING RATE CUTS LATER THIS YEAR” after which 2 rate cuts were being expected this year, but after yesterday’s speech, that probability has shrunk significantly