In response to a softening US labor market, Federal Reserve (Fed) officials are poised to cut interest rates, signaling a policy shift after keeping them steady for the whole year due to inflation concerns sparked by import tariffs. Markets are eagerly anticipating Chairman Jerome Powell’s remarks and the most recent economic forecasts to understand where borrowing costs are headed soon.
The central bank watchers expect internal disagreements over employment and inflation to prevent the Fed from committing to a definitive rate-cutting strategy. Some members favor more substantial reductions, while others advocate putting rates on hold.
This shift in stance comes amid continued pressure from President Donald Trump, who renewed his call for a major cut this week. The political context has also introduced uncertainty regarding attendance at the upcoming meeting, though the final list of participants was likely confirmed Monday evening after the Senate said yes to a new Fed member.
The overall recommendation is to buy the S&P 500 Index (SPX) if the US regulator cuts rates by 0.5%. Profits are taken at $6,650.0. Stop loss is set at $6,590.0.
The volume of your open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
