MARKET UPDATE | FED EXPECTATIONS SHIFT
Fed pivot hopes are fading fast.
January rate cut probability has dropped to 13.3%, down sharply from 28.8%.
Markets are now repricing for a higher-for-longer interest rate environment.
What this signals
• Liquidity conditions are tightening, not easing
• Rate-sensitive assets are losing tailwinds
• Risk appetite becomes more selective, not broad-based
This doesn’t mean markets collapse — it means easy-money rallies pause and positioning becomes more tactical.
What to watch next
• Inflation data and labor market strength
• Fed communication tone changes
• Capital rotation within crypto, not just inflows
Liquidity-sensitive assets are now under the microscope.
Smart money adapts before narratives fully shift.
