The Federal Reserve (Fed) is edging closer to cutting interest rates as inflation cools and job creation steadies. With the bank expected to leave borrowing costs unchanged, all eyes are on Fed Chair Jerome Powell's tone. Live coverage.
Join FXStreet Premium to ask our analysts questions live, read actionable insights and get Gold and signal alerts.
Why the Fed decision matters for markets
The Federal Reserve is the world's most important central bank, and every hint it releases about future policy rocks markets. The bank's interest rate has been stable at the high range of 5.25-5.50% since July 2023, and will likely remain so at the July 2024.
Nevertheless, there is a growing consensus that Fed Chair Jerome Powell and his colleagues will oversee the first rate cut in September, when the bank meets again.
Underlying inflation has been low at 2.6% according to the Personal Consumption Expenditure (core PCE), the bank's preferred gauge. Moreover, the labor market has been cooling down, with the unemployment rising to 4.1% despite ongoing hiring.
Both figures seem incompatible with a high interest rate. Gold and stocks would surge on prospects of lower rates, while the US Dollar would suffer. A hawkish stance would hit the precious metal and equities, while boosting the Greenback.
Live financial market coverage
FXStreet covers major economic releases in a live blog format, to provide readers an instant verdict of the data, rapid analysis of key assets, and for Premium members, the abilty to ask our experts questions in real time.
FXStreet Premium
FXStreet Premium provides subscribers access to analysts, exclusive actionable analysis, signals, Ed Ponsi's webinars, trade plans and a bullish/bearish indicator for Gold on critical events. Join FXStreet Premium here.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks

EUR/USD clings to recovery gains near 1.0950 on US Dollar weakness
EUR/USD is holding onto recovery gains near 1.0850 in European trading on Tuesday amid a broadly weaker US Dollar. The recovery in risk sentiment undermines the havem demand for the US Dollar, lifting the pair. Dovish Fed expectations also weigh negatively on the Greenback. Tariff updates eyed.

GBP/USD pares back gains toward 1.2750
GBP/USD is paring back gains to revisit 1.2750 in Tuesday's European session. The pair draws support from renewed US Dollar weakness and a positive shift in risk sentiment but US President Trump's tariff war and global growth concerns limit its upside.

Gold bounces back above $3,000 as trade war tensions flair up
Gold price is bouncing higher in tandem with Equities after another stellar nosedive move on Monday. The precious metal trades just above the $3,000 mark at the time of writing on Tuesday. The bounce is supported by a technical element on the one hand and a geopolitical driver on the other.

XRP battles tariff turbulence amid MVRV buy signal
Ripple seeks stability in a volatile crypto landscape influenced by macroeconomic factors, including reciprocal tariffs. The international money transfer token hit a low of $1.64 on Monday after opening the week at $1.92, representing a 14.5% daily drop.

Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.