Markets are on edge ahead of the Federal Reserve’s final meeting of 2024, with investor focus shifting to the central bank’s projections for 2025 rate cuts rather than the widely expected 25-basis-point reduction.
What Happened: The outcomes of the projections could trigger vastly different market reactions, from relief rallies to sharp declines.
According to Kurt S. Altrichter, the founder of Wealth Advisory firm Ivory Hill, the significance of the Federal Open Market Committee (FOMC) meeting lies in its forward guidance.
While a 25-basis-point rate cut is almost certain, attention will be on the Fed’s “dot plot,” which signals its outlook for rate reductions in 2025.
Altrichter outlined three key scenarios and their expected market reactions:
- Dovish Scenario: If the Fed signals four rate cuts in 2025 alongside the rate reduction, it would be seen as a bullish outcome. “Solid rally. New highs likely,” Altrichter noted, predicting a decline in the …
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