empty
06.05.2025 12:50 AM
Fed Rate Cut Probability Is Near Zero

This image is no longer relevant

This week marks the third Federal Reserve meeting of the year. At the first two meetings, monetary policy parameters remained unchanged, and there is virtually no chance of a rate cut or hike on May 7. I say "cut or hike" because Trump's trade policy could, at some point, force the FOMC even to tighten monetary policy. That may sound hard to believe now, but just a couple of months ago, few market participants expected such a rally from the U.S. dollar or such a disruption of the global trade balance from Trump.

Trump's policies could significantly raise inflation in the U.S. — inflation the Fed has been trying to tame for years. The Fed may raise interest rates if inflation returns to problematic levels. Let's recall that Powell and other Fed governors have frequently emphasized the dual mandate of the central bank: full employment and low inflation. As labor market and unemployment data showed on Friday, the situation did not worsen in April. Inflation also remains relatively low, so at the moment, the best decision is to pause. Powell also stated that the first effects of the new trade policy won't become visible before summer — or possibly even fall. Thus, it's reasonable to assume that the Fed won't change interest rates at least until then.

This image is no longer relevant

As for market expectations, only 1.8% of economists foresee a 25 basis point rate cut on May 7. For the June meeting, the probability of a rate cut (according to the CME FedWatch tool) stands at 33.6%. By year-end, most economists expect three to four rounds of easing. This means that most of the market anticipates a notable deterioration in U.S. economic indicators during the summer, pushing the Fed to actively lower rates in the second half of the year. If the market barely reacts to rate cuts by the European Central Bank or Bank of England, I have little doubt that it will react to Fed easing. Based on the current wave count, further dollar depreciation remains the primary scenario — and the news backdrop supports this view.

Wave Analysis of EUR/USD:

Based on the analysis of EUR/USD, I conclude that the pair continues to form an upward trend segment. In the near term, the wave count will depend entirely on the position and actions of the U.S. president. That must be constantly kept in mind. According to wave theory alone, I had expected a three-wave correction pattern within Wave 2. However, Wave 2 has already completed as a single-wave correction. Wave 3 of the upward trend is now underway, with targets potentially reaching the 1.2500 area. Their attainment depends solely on Trump. At the moment, Wave 2 within Wave 3 appears close to completion. Therefore, I am considering long positions with targets above 1.1572, corresponding to the 423.6% Fibonacci extension level.

This image is no longer relevant

Wave Analysis of GBP/USD:

The wave count for GBP/USD has transformed. We are now dealing with a bullish, impulsive trend segment. Unfortunately, under Donald Trump, markets may face many shocks and reversals that defy wave counts and any kind of technical analysis. The upward Wave 3 is unfolding, with nearby targets at 1.3541 and 1.3714. It would be ideal to see a corrective Wave 2 within Wave 3 before the rally resumes. But for that to happen, the dollar must strengthen, requiring someone to buy it. Trump must stop imposing tariffs.

Core Principles of My Analysis:

  1. Wave structures should be simple and clear. Complex structures are hard to trade and often lead to changes.
  2. If you're uncertain about what's happening in the market, it's better not to enter.
  3. There is never 100% certainty in market direction. Always use Stop Loss protection.
  4. Wave analysis can be combined with other types of analysis and trading strategies.
Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

Análisis del par GBP/USD. El 3 de julio. Jerome Powell finalmente respondió a Trump.

El par de divisas GBP/USD durante el miércoles se desplomó como una piedra. Sin embargo, cualquier caída del par siempre termina en un crecimiento mucho más fuerte. Por lo tanto

Paolo Greco 07:32 2025-07-03 UTC+2

Análisis del par EUR/USD. El 3 de julio. Una gran ley de Trump aprobada, el dólar en mínimos de 4 años.

El par de divisas EUR/USD durante el miércoles se negoció de manera bastante tranquila, si es que se puede aplicar la palabra "tranquila" a la caída diaria del dólar

Paolo Greco 07:31 2025-07-03 UTC+2

Analisis del par GBP/USD. El 1 de julio. Trump el genio y los estadounidenses ciegos. Parte 2.

El par de divisas GBP/USD bajó moderadamente durante el lunes, lo cual no representa ningún problema para la moneda británica. La libra esterlina puede permitirse tranquilamente perder 100 o incluso

Paolo Greco 07:05 2025-07-01 UTC+2

Análisis del par EUR/USD. El 1 de julio. Trump el genio y los estadounidenses ciegos. Parte 1.

El par de divisas EUR/USD continuó negociándose el lunes dentro de un rango extremadamente estrecho. El lunes hubo pocas noticias, y las que se publicaron no despertaron mayor interés entre

Paolo Greco 07:05 2025-07-01 UTC+2

El Bitcoin convierte a sus competidores en polvo

Expectativas y realidad. Los creadores de criptomonedas las concebían como un universo donde cualquier token podía competir por el dinero de los inversores. En la práctica, aparte del Bitcoin

Marek Petkovich 12:43 2025-06-30 UTC+2

Analisis del par GBP/USD. El 30 de junio. Nóminas no agrícolas, Powell y desempleo.

El par GBP/USD subió 300 puntos durante la semana pasada y, al parecer, no tiene intención de detenerse. Incluso el viernes, el precio no logró iniciar una corrección bajista

Paolo Greco 07:48 2025-06-30 UTC+2

Analisis del par EUR/USD. El 30 de junio. Inflación europea y nueva ronda de discursos de Lagarde.

El par de divisas EUR/USD continúa su movimiento ascendente durante cinco meses consecutivos. En este período, solo hemos visto algunas correcciones bajistas débiles, que cada vez terminaban con otra caída

Paolo Greco 07:48 2025-06-30 UTC+2

Analisis del par GBP/USD. El 27 de junio. La historia no se repite.

El par de divisas GBP/USD continuó su fuerte movimiento alcista durante el jueves. Desde el inicio de la semana, el dólar estadounidense ha perdido "solo" 330 puntos. Ya hemos mencionado

Paolo Greco 07:31 2025-06-27 UTC+2

Analisis del par EUR/USD. El 27 de junio. ¿Podrá Trump equilibrar la balanza comercial?

El par de divisas EUR/USD se encuentra en un "crecimiento libre" (por analogía con el concepto de "caída libre"). El dólar vuelve a precipitarse al abismo, tal como advertimos

Paolo Greco 07:31 2025-06-27 UTC+2

Análisis del par GBP/USD. El 26 de junio. Se acerca el 9 de julio.

El par de divisas GBP/USD durante el miércoles al mediodía se mantuvo en el mismo lugar. Recordemos una antigua señal técnica. Si el precio actualiza un extremo significativo y luego

Paolo Greco 08:30 2025-06-26 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.