Key points for the Federal Reserve interest rate announcement on Thursday:
The probability of a rate cut exceeds 86%, which is basically stable, so according to expectations, the impact may not be significant.
Looking at the dot plot, it is expected that there will be a few rate cuts in 2026, with the market expecting 2 times; more would be considered positive, while fewer would be regarded as negative.
Regarding the balance sheet issue: the reduction has stopped, and now we need to see if the Federal Reserve will start to expand the balance sheet to increase liquidity, which would be a positive signal for the market.
In simple terms, it means stable rate cuts, keep an eye on the number of cuts in the dot plot, and expansion of the balance sheet is good for the market!
