How the yield curve has changed in a year

💡 Why do markets sometimes crash when the Fed cuts rates? At first glance, lower interest rates should be bullish. Cheaper money, easier credit, higher valuations. But history tells a more complicated story: 📉 2001 – The Fed started cutting as the dot-com bubble burst. Stocks kept falling. 📉 2008 – Aggressive cuts during the financial crisis didn’t stop the selloff. 📉 March 2020 – Emergency cuts to zero only triggered panic selling and sent the VIX above 80. 📉 Dec 2024 – A 25 bps cut came with “hawkish” guidance. Markets dropped nearly 3% in a single day, and volatility spiked ~74%. So what’s going on? 🔑 Rate cuts are a signal. Emergency cuts = confirmation something is very wrong. Small cuts with hawkish guidance = “policy won’t cushion the slowdown.” When positioning is stretched, even good news can turn into a “sell the news” event. ✅ The context matters more than the cut itself. When cuts are seen as proactive “insurance” (e.g., 2007, Nov 2024), markets rally. When they confirm crisis or disappointment (2008, 2020, Dec 2024), markets sell off. 👉 Next time the Fed cuts, don’t just watch the basis points — watch the narrative behind the move.

The expectations have become reality: the Fed cut rates by 25 bps, bringing the target range down to 4.00%–4.25%. After weeks of speculation, the move reflects moderating growth and inflation that remains above target. Policy decisions like these ripple across global markets—making it essential for investors to stay informed and ahead of the curve. 🔎

The Fed may cut rates twice this year and four or five times by next, but seven decades of history show stocks have advanced regardless of Fed policy.  #Markets #FederalReserve  For more information on Fed rate cuts, see the link in the thread.

FED RATE DECISION – 17th of September 🛎️ What is expected today? Markets are pricing in a 25 bps cut with around 95% certainty. While a more aggressive move seems unlikely at this stage, traders will be watching closely for any hints from the Fed about the pace and likelihood of further cuts later in the year. The decision ultimately depends on several key factors, including inflation trends, labour market strength, tariffs, and broader economic conditions. So what could happen today? ❓ If we get a cut and the Fed signals that more easing is likely ahead, stocks could push higher. If we get a cut but the Fed suggests that further cuts are less likely, markets may pull back. Any surprises — such as a larger cut or no cut at all — could trigger significant volatility in both directions. For more in-depth information make sure you go over to our blog page where one of our coaches have covered it all! https://lnkd.in/eCvkR5pv At DND, we cover every Fed decision in detail, and tonight will be no exception. Make sure you sign up with DND to stay informed and ahead of the curve with the latest insights on market moves. www.dndtrading.co.uk

Fed shocks markets with a 25 bps cut — federal funds now 4.00%–4.25%! Quick, hard-hitting recap of the September 2025 Fed decision: near-unanimous vote, dovish dot plot signaling 2–3 more cuts this year, unchanged QT runoff, and shifting emphasis toward employment risks. We break down GDP, unemployment, and PCE inflation projections and explain why markets are rallying — easing, not front-loading. Like & share if this helped you understand the Fed move. More insights at DhandaTheGreat.com #Fed #RateCut #September2025 #DotPlot #Markets

The key question this week is whether the Fed will push back against market wagers on a string of cuts extending into next year when officials gather on Wednesday. Traders are almost fully pricing reductions at each of the next three meetings, betting the Fed will lean toward supporting a softening job market even as inflation remains above target. The week ahead for risk could be a bumpy ride, especially if the Fed deliver a message that lands hawkish, I still see the path of least resistance as leading higher, with economic and earnings growth solid, calmer tones prevailing on trade, and a looser monetary stance helping to juice things along.”

📉 Markets Brace for Fed Rate Cut 📈 Traders almost universally expect the Federal Reserve to lower interest rates on Wednesday, with a 96% probability of a 25 bps cut already priced in. This move comes as: The labor market shows signs of cooling Inflation remains above the Fed’s 2% target Beyond the rate decision, all eyes will be on the “dot plot” — the Fed’s quarterly economic projections — to gauge policymakers’ outlook for the next year. Markets will also track whether any Fed officials dissent on the policy stance, after two disagreements surfaced in July’s meeting. 🔎 What’s at stake? A potential rate cut could provide a cushion for the U.S. economy, but the path ahead depends on balancing inflation control with growth momentum. 👉 Do you think the Fed will stick to a steady 25 bps move, or could there be a surprise half-point cut? #FederalReserve #InterestRates #Markets #Economy #Inflation

Fed Meeting Wednesday! 25 bps Cut? …Already Priced. The Forward Signal ? …That’s the Game-Changer Markets have nailed a 94% probability for a 25 bps cut on Wednesay. Although that’s not the story, it’s the roadmap for the next 6–12 months which is most important. Will the Fed lay out a dovish glide path? Let’s take a Macro View. 🌍 Global Backdrop: US Growth Holding Firm: Atlanta Fed’s GDPNow pegs Q3 at 3.1% SAAR (as of Sept 10). No cliff edge yet. 📍Europe Stabilizing Eurozone PMI nudged up to 51.0 in August, with manufacturing in expansion for the first time since early 2022. 📍Labor Soft, Not Broken: Jobless claims hit 263k—the highest in nearly 4 years but still far from recession danger. 📍Inflation Slightly Sticky in Spots: August CPI at 2.9% YoY, core ~3.1%, with shelter and tariffs keeping pressure alive. 📈 Why We Think Markets Remain Resilient 1️⃣ Policy Reflex Policymakers know deep sell-offs cost votes and credibility & quick pivots (on tariffs, fiscal moves) are now the norm. 2️⃣ No Classic Recession Flashpoints Growth is intact, inflation is moderating, and unlike 2008 or 2022, rate hikes aren’t on the table. 3️⃣ Fed’s Toolkit Is Back: With rates still near 5%, the Fed actually has cutting room this cycle, something missing for over a decade. 💡 Watch the yield curve as dovish signals could steepen it, creating a tailwind for banks and cyclicals. 🎯 Wild Card: The Messaging Bullish Case: Hints of 2–3 more cuts by year-end will be supportive for equities and credit. Bearish Case: Hawkish tone…yields jump, and risk reprices fast. 📝 OurTake: Cautiously Constructive We expect the Fed to cut and lean into a balanced “dovish but data-dependent” tone acknowledging labor weakness without panicking on inflation. That backdrop can support risk assets grinding higher into Q4. Now if Powell leans hawkish? A 3–5% equity pullback wouldn’t be a surprise #FedMeeting #Markets #Investing #MonetaryPolicy #Economy #markets #insight #macro

Fed meeting is one of the most closely-watched in recent memory. Here’s what I expect the Fed to actually deliver (as opposed to what I believe they should do): • Rates: A 25 bps cut is highly likely—the first of the year. There’s only a small chance of a 50 bps cut, and virtually no chance they hold rates steady. • Voting: We could see one-sided dissent(s), regardless of the decision. If it’s a 25 bps cut, the odds of two-sided dissent are low. • Policy Path: It’s unlikely the median dot plot and terminal rate projections will be as dovish as the market is currently pricing in. • Economic Projections: Expect a somewhat weaker labor market outlook (medium-to-high probability) and only a modest chance of hotter inflation forecasts. • Yield Curve Control: Despite growing chatter in the press and among analysts, Powell is unlikely to emphasize this in his press conference, and it won’t appear in the official statement. What are your expectations?