watch the Fed's projection dot plot, not the Fed Funds rate

watch the Fed's projection dot plot, not the Fed Funds rate the 25bp/0.25% cut on September 17th 2025 will happen, and it's mostly priced in it's the future interest rate policy guidance that can amplify a market move either way

based on the current Fed policy guidance available since June 2025, by the end of 2025 the Fed Funds rate should be ≈3.9% current one is 4.25%-4.50%, so we either get a larger than 25bp cut or several rate cuts this year

a cut larger than 25bp is highly unlikely, since the current CME's 30 Day Federal Funds Futures price strongly implies a 4.0%-4.25% target rate this is 25bp/0.25% below the current target rate of 4.25%-4.5%

so the most likely outcome is a 25bp/0.25% rate cut on September 17th 2025, and then at least one more cut in 2025

during the Sept 17th 2025 FOMC meeting, the Fed will publish a new dot plot with the suggested interest rates for 2025, 2026, 2027 and longer-term

how will asset prices react to Fed's interest rate decision? if the FOMC members suggest rates lower than in the June 2025 - expect an upwards rally in assets if the FOMC members suggest higher or non-decreasing near future rates - expect a downward rally/profit taking in assets