Market Pauses Ahead of Fed’s Interest Rate Decision

By far, this is the most important day on the calendar this week, or perhaps even this month. All eyes are fixed on the Federal Reserve’s impending interest rate cut. While a cut is almost guaranteed, the real question lies in its magnitude: will it be 25 basis points or 50? Most experts predict a 25 basis point reduction, but only time will tell.

Ahead of the decision, we have already seen inflation data from the UK, which came in at 2.2%, right in line with expectations and unchanged from the previous reading—no surprises here. Naturally, the focus remains on the Fed’s move, with the market largely in a holding pattern awaiting clarity.

In terms of market movements, indices are showing mixed signals. Trading remains close to zero, with some indices flashing slight gains and others recording small losses. The S&P 500 is hovering around key resistance at 5,660 points, having bounced off this level. Traders will want to keep an eye on this resistance zone as the day unfolds.

On the currency front, we’re seeing a noticeable correction in the American dollar, with weakness evident as the European session kicks off. The Japanese yen leads the gainers, along with strength in the New Zealand dollar, Swiss franc, and British pound.

Commodities are also making moves. Oil is experiencing a much-needed correction after its recent surge, while metals are continuing their bullish trend. Precious metals, in particular, have had an impressive start to the week and are still pushing higher as we head into the pivotal rate decision.

Everything today hinges on the Fed’s rate cut decision. Markets are poised, and traders are watching to see whether the cut will come in at 25 or 50 basis points. The results could spark significant volatility, so stay tuned and be ready to react once the decision is announced.

Source: https://www.axiory.com/analytics/market-news/market-pauses-ahead-of-fed-s-interest-rate-decisio