The Federal Reserve cut rates by 0.25% as widely expected, lowering the federal funds target range to 4.00–4.25%. However, the real market-moving factor came from the Fed’s updated forecasts, which signalled expectations of two more cuts before the end of this year.
Chair Jerome Powell described the decision as “reducing risk management,” while clarifying that it should not yet be seen as the start of an aggressive easing cycle. With inflation stabilizing near 3%, the Fed believes additional easing may still be needed, but cautiously.
The immediate reaction boosted U.S. equities, which climbed to fresh record highs. The U.S. dollar index dropped briefly to its June 30 low before rebounding, now stabilizing above 97.00. The dollar avoided a sharper fall mainly because its counterpart currencies remain under pressure from weaker economic conditions.
Market Outlook
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U.S. equities are likely to extend gains.
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The dollar may consolidate just above 97.00 on the index.
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Cryptocurrencies may continue trading sideways.
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Overall, the backdrop remains moderately positive.
Daily Forecasts
Gold (XAU/USD)
Gold is pulling back after hitting another record high. Technical overbought signals suggest a dip toward support at 3619.60 before a potential reversal targeting 3700.00. A suitable buying opportunity may emerge near 3619.60.
GBP/USD
The pair has found support around 1.3580. On expectations of further Fed easing, GBP/USD could turn higher toward 1.3750 after a minor pullback. A suitable buying entry may be near 1.3620.
