Fed Decision Looms as Markets Brace for Year‑End Cut Speculation

The Fed’s Wednesday rate decision is pushing market expectations into a prolonged waiting mode that could stretch until year‑end.

Rate Expectations and Market Reaction

Analysts place the odds of a 25‑basis‑point cut at roughly 30 %, while the probability of holding rates steady sits near 70 %.

■25 basis‑point cut expectation

■70 % likelihood of a pause

■$1.2 trillion balance‑sheet runoff pause

Year‑End Cut Scenario and Strategic Impacts

If the Fed holds off until the end of the year, the yield curve’s flattening could leave short‑term Treasury yields hovering around 4.5 %.

■Dollar Index down 0.3 %

■S&P 500 volatility picking up

■Gold finding support near $1,950 per ounce

Caner Yılmaz: The Fed’s patient stance is keeping liquidity facilities active to avert a market shock, while offering investors a chance to tilt strategic allocations toward bonds.