4 min readThe Federal Reserve cut rates by 25 basis points (0.25%) to 4.5%—4.75% in line with expectations. However, the Fed’s outlook for rate cuts in 2025 was more hawkish than three months ago. The dot plot, which measures policymakers’ forecasts for rate cuts, signaled 50 basis points of cuts in 2025, fewer than previously expected.
The more hawkish stance from the Fed comes as policymakers see inflation ending 2025 at 2.5%, up from 2.1% previously forecast and unemployment at 4.3% down from 4.4% previously expected.
DOLLAR INDEX (DXY):
Post the release of the rate decision, we have seen the Dollar Index rise 0.7%, which has correlated to a 0.70% increase on EUR/USD and 0.7% fall on USD/JPY.
EURO VS DOLLAR (EUR/USD):
If we take a closer look at the technicals, we can observe how price was trading just below 1.0486 before the decision, and post the decision we have seen price action fall further towards the 1.04 region. Marking a significant break in structure to the downside.
S&P 500 (SDX):
The S&P 500 has also seen a direct impact from this Fed rate announcement, as we saw the price trading at just over $6,060.00 before the announcement, and currently we are trading just below $6,000. Marking a fall of over 0.6% within the hour.
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