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Posted by goldielocks
@ 20:23 on September 16, 2025
It will also depend on how he explains his decision.
Market expectations
As of Tuesday, September 16, 2025, a 25-basis-point cut is widely anticipated by investors. The CME FedWatch tool shows a 96% probability of such a cut, and financial analysts have largely factored it into asset prices.
Because it is an expected move, a simple 25-basis-point cut is less likely to trigger a massive, immediate rally in stock prices. Some analysts even suggest a short-term, “sell the news” pullback is possible as investors who bought in anticipation of the cut exit their positions.
A larger, 50-basis-point cut would be a significant surprise and could cause a powerful, immediate rally. Conversely, no cut at all would likely disappoint the market and lead to a sell-off.
The significance of Powell’s commentary
The key driver of market movement will be Powell’s remarks during his press conference, especially his tone regarding future rate cuts and economic conditions.
A dovish 25-basis-point cut This scenario involves a 25-basis-point cut accompanied by language signaling more rate cuts in the future.
How it happens: Powell would emphasize the need to address the weakening labor market, which is showing signs of softness. The updated “dot plot” of economic projections would likely show officials anticipating multiple cuts by year-end.
Likely market reaction: This would be perceived positively by the market, potentially leading to moderate gains for equities, especially growth-oriented sectors like technology. A dovish outlook would reinforce confidence that the Fed is poised to support the economy.
A hawkish 25-basis-point cut This scenario features a 25-basis-point cut but is accompanied by cautious or non-committal commentary from Powell about further cuts.
How it happens: The Fed might note the weakening jobs market but stress that inflation is still a concern, especially with prices trending upward. Powell could emphasize that future decisions will remain “data-dependent.”
Likely market reaction: This could be interpreted as a “hawkish cut,” which would disappoint investors who expect more aggressive easing. Stocks could react negatively or remain flat as the prospect of fewer future cuts spooks the market.
Broader market implications
Beyond the short-term stock market reaction, a 25-basis-point cut has other significant implications:
Borrowing costs: The cut would likely be passed on to consumers and businesses in the form of lower interest payments on loans, including mortgages, credit cards, and auto loans. Some of this is already priced in, so the drop may be modest.
Bond market: Government bond prices would likely rise, and yields would fall, as a rate cut makes existing bonds with higher fixed interest payments more attractive. For dividend stocks, lower bond yields would also make their payouts comparatively more appealing to income investors.
Savings rates: Interest paid on savings accounts and CDs would probably decline, making saving a less rewarding activity.
Investment sentiment: With rates trending downward, money tends to flow out of lower-yielding savings and bonds and into higher-risk assets like stocks and real estate, fueling bullish sentiment. However, some analysts are concerned that elevated stock market valuations and other economic factors could pose risks.
Posted by goldielocks
@ 18:47 on September 16, 2025
With Trump and the Fed who seems to lean left good luck with that on anything paper. Least have mental stops cuz I don’t trust the MMs to not drop down and grab up your shares at a discount. The bigger question is when a market correction occurs will it be a fast one or a slow take down through the months while people lose money over time.
The shares were well weak today, tks to the relative thiness of the mkts…I note Gold was sold down ….to 3674….and in days gone by Gold would no doubt have cratered way more …but as of now Gold is back to 3693, 10 bucks off the hi….that to me says the buyers will take any sellers on….
Posted by goldielocks
@ 16:09 on September 16, 2025
Was interrupted. I think if there is no rate cuts it will be negative. If it’s a low 25 pts and expected to be more it could be negative or flat temporarily, if 50 pts and with their mindset unlikely less coerced it would be positive for the market.
Posted by goldielocks
@ 15:43 on September 16, 2025
I bet that’s what a lot of people are thinking. But it likely could be temporary too. Either way when the bigger drop comes it would be good to have cash on hand to buy the lows. I followed Buffett and locked in short term interest bills bought and maturing at different months Ill have a opportunity to roll over or cash out. Then of course the phyzz I keep giving away to hold for now but if something happens to me turns irrevocably theirs left where I want it to be ” I’ve been through those rodeo’s before’ so ahead of time then buying more little by little.
I assume all the stocks have been doing very good lately because of the news. Or the “rumor” that they are going lower. Remember the old saying, buy the rumor and sell the news? So are we going to get a big sell off tomorrow??
And if they don’t lower the rates, that could also start a correction. Are any of you thinking of cashing out your most recent buys while they are still in the money? That’s what I’m thinking.
Posted by goldielocks
@ 15:15 on September 16, 2025
Yeah it doesn’t seem normal but then things aren’t normal now driving it. It’s not just the charts it’s the fundamentals that changed. The concession from those with much knowledge that we are heading for a recession at least. Some think it will bring stagflation, one Dowd pointed out that the rising of housing costs was brought on by not just the Fed but Biden open borders and real numbers of 20 million where they were building for them and all the other money they spent on them at tax payer expense, then the delay of bringing down the increased interest rates they also delayed bringing up there will be impending crash in housing prices needed to normalize that catastrophy will be deflationary because housing is included in the numbers. But then we have the other inflationary factors and debt so maybe it will balance out more towards a temporary recession and dollar devaluation than a outright depression. Hopefully But for now that isn’t happening yet.
Posted by ipso facto
@ 12:57 on September 16, 2025
What will the Fed do re: interest rates
Lower one half point (100%, 1 Votes)
Keep them the same (0%, 0 Votes)
Lower one quarter point (0%, 0 Votes)
Lower Three quarters of a point (0%, 0 Votes)
I don’t know (0%, 0 Votes)
Total Voters
in a thin mkt when the buyers may be nervous of the Fed meeting…are the sellers sure the Fed will help them….that sure wouldn’t be a first…after all the Bills from the Hamptons are now coming due….all that vintage champagne, those fancy foreign chefs, that the trophy wife was so , so keen on and just why were there so many midweek afternoon meetings needed to plan every meal, when you were at the office !!!!…..may as well get the idiot bugs to pay for’it all .
die hard bugs and In count Sprott in that camp, as are all the people in any funds….so it has to be spread funds….where do I short those funds…does anyone have any idea….
Wondering if they’re starting their correction a day early. As much as I’d like them to go up every day, we’re overdue.
Deer79 – thanks. It looks like the market thinks those results are good. My only concern with them is some tax loss selling into year end, but even so, it seems $.80 or so is good support.
I think you’re 25 basis point cut scenario is “spot on.”
The longer we don’t get a correction, the stronger the veracity of a recalibration of the Gold price, comes into play…..FWIW.
Elero came out with drill hole results for 5 holes. (I wish that these PM companies could put their drill hole results into laymen’s terms, so us Gold bugs who don’t have geological expertise, can comprehend them). From what little expertise I have, it sounds like these results have expanded and upgraded the mineralization of tin, and silver.
I don’t see how it keeps going this way. PM’s are acting like the QQQ’s have been for years, where they go up every day for weeks on end with no correction. I’m not complaining, but it’s going to take some getting used to – a new mindset.
That’s the plus side for holding physical, it’s not as tempting to sell when you have some profits.
$5 away at the moment. Looks like silver might have decided to join the party as it’s been flat for a while but is now inching back up. The dollar is faltering with the 10 yr. flat. No doubt in anticipation of a rate cut. Crypto is flat. Oil is up near 1%.
PM shares are solid premarket again.
I think anyone who’s been around the pm market as long as most of us have, must be waiting for a flush. I suspect if they cut .25, then we’ll get flushed hard, the markets won’t like it, the dollar will likely rally, and rates will actually rise. Just a hunch. How long it all lasts is beyond me. IMHO, if this doesn’t happen and pm’s continue higher, then there might be something else and much bigger going on with pm’s, maybe a revaluation? I say this because we are well past time for a pullback.
Some eco data today, the biggest is probably retail sales at 0830.
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