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2025-07-31 18:01:25
[Federal Reserve's September rate cut dream dashed? Market bets shift dramatically!] ⑴ The Federal Reserve avoided signaling an imminent rate cut, forcing investors to significantly lower their expectations for a rate cut at the next policy meeting. ⑵ The Federal Open Market Committee held interest rates steady in a split vote on Wednesday, offering few indications of when borrowing costs might be lowered. ⑶ The Fed's benchmark overnight policy rate remained in a range of 4.25%-4.50%, unchanged since December. ⑷ Treasury yields and the US dollar rose in late trading, while stocks fell, as the Fed gave no clear indication of a possible rate cut at its September meeting. ⑸ Carson Group Global Macro Strategist Sonu Varghese believes the Fed has postponed the possibility of a rate cut, pending further data. ⑹ According to data from the CME FedWatch tool, traders' bets on a September rate cut have fallen to 46% from approximately 65% a day earlier. ⑺ The market no longer anticipates two full 25 basis point rate cuts this year. ⑻ Federal Reserve Chairman Powell stated at a press conference that no decision had been made regarding the September meeting, emphasizing that there was still time to collect extensive data before the next meeting. ⑼ Bond yields climbed on Wednesday, with both 10-year and 2-year Treasury yields rising by approximately 2 basis points after Powell reiterated that the economy remained resilient. ⑽ The Russell 2000 small-cap index fell 0.47%, while the large-cap S&P 500 fell 0.12%. ⑾ The US dollar index rose 1% to a two-month high, narrowing its year-to-date losses to 8%. ⑿ Vishal Khanduja of Morgan Stanley Investment Management expects three to five interest rate cuts by the end of next year, but emphasized that the next two inflation data releases will be crucial.
