US Federal Reserve Meeting 2025: After keeping interest rates unchanged for five straight meetings over the past nine months, the Federal Reserve is largely anticipated to deliver a quarter-point rate cut following its two-day September meeting this week.
The decision, scheduled for Wednesday, September 17, comes against the backdrop of worsening US economic indicators, especially weakness in the labour market, fueling expectations that the Fed will trim its benchmark rate by 25 basis points.
In the July 25 FOMC meeting, the Fed Chairman signalled that upcoming policy decisions would hinge on labour market conditions. Recent data has pointed to a weakening job market, with slower hiring, more unemployment claims, and a rising jobless rate. This has fueled investor expectations that the central bank will cut its benchmark interest rate by 25 basis points on Wednesday, bringing it down to around 4.1 per cent.
What should investors do ahead of US Fed meeting?
According to Ankita Pathak, Macro Strategist and Global Equities Fund Advisor at Ionic Asset, despite higher inflation, the Fed is on track to cut 25bps this week, which has already been priced in by the markets.
“All eyes will be on guidance and way forward, an unexpected dovish guidance may create a melt-up-like scenario in the US and may benefit cheap emerging markets like China and Korea. On the other hand, a hawkish stance and limited scope of further policy action may spark a classic sell on news kind of trade in the US. Back home, all eyes will be on FII flows, which can be helped by a lower dollar, earnings and RBI action ahead,” Pathak said.
Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking Private Limited, suggested investors to adopt a cautious ‘buy-on-dips’ strategy amid heightened volatility.
“Given the backdrop of heightened volatility and uncertain global cues, traders are advised to adopt a cautious “buy-on-dips” strategy. Booking partial profits on rallies and maintaining tight trailing stop-losses is recommended to manage risk. Fresh long positions should only be considered if the Nifty sustains above the 25,160 level. While the broader trend remains cautiously bullish, close monitoring of key technical levels and global developments will be essential for navigating the current market environment,” Shinde said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
