Late night market signal! If the Federal Reserve cuts interest rates more than expected, will it trigger a global market explosion?
Currently, the market expects a high possibility of a rate cut, with a probability exceeding 86%. If the announcement of a rate cut meets expectations, the direct impact on the market may be limited. What needs more attention is its prediction for the interest rate path in 2026; the general expectation is for two rate cuts. If the prediction exceeds two cuts, it may boost market sentiment; if it’s less than two, it may bring pressure.
In addition, the Federal Reserve has stopped balance sheet reduction; whether it will turn to expand its balance sheet and inject more liquidity into the market will also be an important factor affecting the trend of risk assets.
Overall, this meeting involves not only whether to cut rates but is more crucially about the future policy signals it conveys.
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