The Federal Reserve (Fed) will announce its rate decision today at 2 pm ET, followed by Chairman Kevin Warsh’s press conference at 2:30 pm ET.
Traders typically assign greater weight to FOMC meetings that come with updated economic projections and a “dot plot” of interest rate forecasts. Today’s meeting lacks both. However, the result is still of enormous importance for three reasons.
Unusual uncertainty about the outcome: Markets are still assigning about a 35% chance of a rate hike, CME fed funds futures show. That level of indecision is rare so close to a decision. By now, traders have generally converged on a clear expectation of a maintenance, raise or cut. Citadel, one of the world’s largest hedge funds, predicts an increase. The firm maintains that a move would end future guidance as a policy option, an outcome President Warsh has long favored.
Bond yields are already rising: Both the 10-year and the two-year Treasury Yields have broken above key trend lines that defined the shallow pullback that has occurred since 2023 (see daily signal). With the breakout complete, the path of least resistance is now clearly established to the upside.
