Anyone else feel like we’re walking into a weird Fed meeting this time?
Everyone keeps calling it a “hawkish cut” setup which honestly sounds like an oxymoron but New York banks are basically telegraphing the same thing:
“Yes, we’ll cut… but don’t get excited.”
And that’s exactly the kind of messaging that usually whips the market in both directions before we get any real clarity.
Here’s what’s messing with my head right now:
Inflation is cooling, but not in a way that gives Powell the victory lap he wants.
Labor data looks soft enough for a cut, but not soft enough for a full pivot.
The bond market is acting like cuts are already guaranteed, while equities are pretending they’ve already spent the money.
If we do get a hawkish cut, I’m honestly not sure which side reacts harder tech has been running on fumes, defensives are asleep, and small caps are out here fighting for their lives.
My gut?
Powell cuts 25bps, sounds like a disappointed dad, and the first move is the wrong move.
Every FOMC lately has been a fade the initial-reaction trade.
What I’m watching:
Whether Powell mentions “financial conditions” tightening big clue.
How the dot plot shifts for 2025 (this will decide who bleeds).
If he pushes back on “multiple cuts” expectations that’s where the fireworks start.
I’ve traded through a lot of these, but something about this one feels like the market is too sure of the outcome.
Whenever that happens, the Fed usually smacks someone.
Curious what’s everyone positioning into this?
Are you hedging? Sitting in cash? Leaning into the volatility?
Or just grabbing popcorn and letting algos fight it out?