JUST IN: 🔥 🔔 THE FED'S FINAL SHOWDOWN: Expect a "HAWKISH CUT" Today 🦅📉
The Federal Reserve concludes its December 9-10 FOMC meeting today, and the market is braced for extreme volatility driven by a single theme: the "Hawkish Cut."
⏰ Timeline: Today, December 10th (ET)
2:00 PM: FOMC Statement & Crucial "Dot Plot" released.1
2:30 PM: Chair Jerome Powell's Press Conference.2
💰 The Anticipated Move
Markets are nearly certain (87-90% probability) the Fed will deliver a:
25 Basis Point Rate Cut (Third straight cut this year).3
New Target: 4$\mathbf{3.50\%}$ to 5$\mathbf{3.75\%}$.6
🚨 Why the "Hawkish Cut" Matters
The cut is priced in, but the GUIDANCE is not. A "hawkish cut" means the Fed lowers rates but uses restrictive language to signal they are not committed to further easing in 2026. This would disappoint markets betting on aggressive cuts and could be bearish for risk assets.7
Key Watchpoints for Volatility:
The Dot Plot: Look at the median interest rate projection for 2026.8 If it remains cautious (like the September projection of only one cut), it will be seen as a hawkish pushback against the market's high expectations.
Powell's Tone: Will he emphasize the softening labor market (dovish) or focus on inflation remaining above 2% and the uncertainty from delayed economic data (hawkish)?
Balance Sheet Clues (QE?): Following the end of QT, any mention of T-bill purchases to replenish reserves could signal a shift towards a looser liquidity environment.
The Bottom Line: Today’s market reaction will be all about Powell's words, not the expected rate cut itself. Brace for potential downside if the Fed signals a pause after this move.
What's your trade: Long Volatility (VIX) or Long Risk (BTC/Stocks) after the announcement?
