đ¨ FED WEEK = MARKET NERVES ON EDGE đ¨
U.S. inflation has cooled to ~2% đŻ
But Powell has stayed cautious, sticking to the 25 bps cut narrative for the last 3 months âł
So the big question đ
Does the FED cut rates this week?
đ Base case:
â YES, a cut is likely â but 25 bps, not 50.
Why not 50?
⢠The FED wants to avoid shocking markets
⢠Powell prefers gradual easing, not panic cuts
⢠Jobs, growth, and financial conditions are soft â not broken
â ď¸ A 50 bps cut would signal stress under the surface â something Powell clearly wants to avoid unless forced.
Translation for markets đ
⢠25 bps = âcontrolled slowdownâ
⢠50 bps = âsomethingâs wrongâ
Right now, the FED wants confidence, not chaos.
Expect caution.
And remember â Powell talks slow, markets move fast đ
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