ALERT: WILL MARKETS CRASH AFTER FOMC RATE DECISION?
In a Nutshell
Markets face potential volatility after today's FOMC rate decision, where a pause is nearly certain but Powell's tone and an updated dot plot could signal tighter policy ahead. Nasdaq is testing support after yesterday's drop and may break lower if the Fed strikes a hawkish note. Traders should avoid leveraged positions amid uncertainty from inflation data, geopolitics, and the upcoming announcement.
These notes were generated by AI and may contain inaccuracies.
Markets are trading oddly today ahead of the FOMC rate decision. Today's decision comes three hours after filming, with plans to go live for coverage. There is a 98.9% probability the Federal Reserve will pause rates and a 1.1% probability they will raise rates. This outcome is not expected to create much surprise. The primary focus will be on the Fed's tone during the press conference scheduled 30 minutes after the decision.
CPI and PPI have come in higher despite falling oil prices, keeping inflation above target. Markets will closely watch Jerome Powell's tone. The Fed's updated dot plot may carry even greater weight, with three officials expected to pencil in rate hikes this year. A higher dot plot shift could pressure stocks and crypto because markets do not want higher rates.
Higher rates make borrowing more expensive for individuals, businesses, and public companies, which contracting the economy and discouraging spending. Coverage of the decision, press conference, and market reaction will occur during today's live stream.
The Nasdaq is trading similarly to yesterday but attempted recovery with three retests at market open, shortly after open, and approximately one hour later. It failed to break above new highs and is now retesting previous lows. The index approaches the decision three hours away. Attention turns to whether it will establish the common support range seen yesterday or break support and continue selling off.
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