Rate Cut Lands: How Will Market Move Tonight? How Many Cuts Are Expected in 2026?
Global markets are holding their breath ahead of the Federal Reserve’s policy decision to be released on Wednesday.
CME FedWatch tool is pricing in nearly 89.4% probability of a rate cut, yet what investors worry about more is whether the Fed will deliver hawkish signals alongside the cut, which could dampen expectations for a sustained easing cycle.
At the upcoming meeting early Thursday morning, Powell’s remarks and the dot plot will be the key focus. His comments will set the tone for the next two meetings.
If the message leans dovish, inflation expectations may strengthen further, and equity indices as well as gold and silver could continue to move higher in the short term.
If he sounds more hawkish, that would align with current expectations in the bond market, meaning market reactions may be muted. This could spark a modest pullback in equities and precious metals — but such a pullback may present buy opportunities.
Some anticipate that the market may move like this tonight:
Even though a rate cut is widely expected, investors are looking beyond the immediate 25-basis-point move and focusing instead on the post-meeting statement and guidance on the future policy path.
Goldman Sachs forecasts that five FOMC participants will register a “soft dissent” against this week’s expected 25 bps cut, projecting a 2025 median dot-plot rate of 3.875%, implying fewer total cuts than the committee’s median projection.
How will the market move tonight?
Will we see a gap-up then pullback, or a gap-up and follow-through?
And how should we interpret the 2026 rate-cut dots?
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If Powell sounds hawkish, the reaction may actually be muted since the bond market already expects it. Any dip in stocks or metals would likely be modest, and I’d view that kind of pullback as a potential buying window, especially with easing still on the table for 2025.
For the 2026 dots, I’d see them as guidance on the Fed’s long-run comfort zone, not a strict plan. Fewer cuts into 2026 would simply signal caution during a soft-landing phase, meaning more near-term volatility but still a constructive medium-term outlook.
@Tiger_comments @TigerStars
More importantly Jerome Powell adopted a less hawkish tone than feared. This perceived doveness unleased a massive relief rally across major stock indices.
Investors rotated into risk assets, driven by hopes for easier financial conditions ahead and a clear "wait and see" approach from the Fed that calmed fears of overly restrictive monetary policy.
Hooray for Jerome Powell! He is like Santa Claus sending cheer to the markets. 🥰🍀🥰🎅🎅🎅🌈🌈🌈💰💰💰🎁🎁🎁
@Tiger_comments @TigerStars @Tiger_SG @TigerClub @CaptainTiger
如果信息傾向於鴿派，通脹預期可能進一步強化，股指以及金銀短期內可能繼續走高。
如果他聽起來更鷹派，這將符合債券市場目前的預期，意味着市場反應可能會平淡。這可能會引發股市和貴金屬小幅回調——但這種回調可能會出現買入機會.
The 2026 rate-cut dots in the Federal Reserve's dot plot refer to the median projections from FOMC members for the number of anticipated interest rate reductions in 2026, as shown in the Summary of Economic Projections (SEP) released alongside FOMC meetings. Following the December 2025 meeting, these dots indicate a median expectation of two 25-basis-point cuts, bringing the federal funds rate to around 3.00%-3.25% by year-end, reflecting a cautious approach amid sticky inflation, softening labor markets, and uncertainties like tariffs.
CME FedWatch工具的定價接近降息概率爲89.4%，然而投資者更擔心的是美聯儲是否會兌現削減旁邊的鷹派信號，這可能會抑制對持續寬鬆週期的預期。