We are finally here.
The Fed is expected to resume lowering the federal funds rate this Wednesday, September 17. Here is what will really matter on Wednesday:
• The magnitude of the rate cut (0.25% or 0.50%)
• The update of the Fed’s macroeconomic projections (its forecasts for inflation, employment, and also the path of interest rates)
• The trajectory ahead (for the end of 2025) of the federal funds rate
• Jerome Powell’s press conference, particularly his assessment of the timeframe for normalizing inflation with tariffs
After a summer of speculation, the US Federal Reserve (Fed) will unveil this Wednesday, September 17, a monetary policy decision that could redefine the trajectory of financial markets through year-end. This meeting is not a simple technical adjustment: it embodies all the tensions accumulated since Jerome Powell and the FOMC members paused their rate-cutting cycle last December. This may be the moment of the famous “pivot” investors have been waiting for since early 2025.
The underlying question is simple: will the Fed settle for a limited 25 basis point cut, or surprise with a more aggressive “jumbo cut”? The decision will not only concern the immediate level of rates but also the message sent to markets: the path of monetary policy for the remainder of 2025, consistency with inflation and employment projections, and above all, the balance of power among the 12 FOMC voting members. Recall that 7 votes out of 12 are needed to approve a rate cut, and Jerome Powell counts as only one vote among the 12.
In short, it’s not just a number but a trajectory of monetary policy. And it is this trajectory that will shape the year-end trend of risky assets in the stock market.
If Powell manages to open the door to clearer easing while remaining consistent with his latest macro forecasts, the market may finally gain the visibility it has been demanding. Otherwise, we risk staying in an uncertainty zone where every employment or inflation statistic reignites doubts. And in this game, the referee remains the same: the US 2-year yield. It is the US 2-year Treasury yield that best anticipates the upcoming path of the federal funds rate.
The S&P 500, the barometer of large caps, and the Russell 2000, more sensitive to domestic conditions, will hang on Powell’s words.
The Fed will update many macroeconomic data this Wednesday, but ultimately one factor will dominate: the “Fed Cut Path” – the number of rate cuts expected by year-end. This will be directly tied to the timeframe the Fed deems necessary to normalize inflation.
In short, the Fed’s decision on Wednesday, September 17, will shape the year-end stock market trend.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
The Fed is expected to resume lowering the federal funds rate this Wednesday, September 17. Here is what will really matter on Wednesday:
• The magnitude of the rate cut (0.25% or 0.50%)
• The update of the Fed’s macroeconomic projections (its forecasts for inflation, employment, and also the path of interest rates)
• The trajectory ahead (for the end of 2025) of the federal funds rate
• Jerome Powell’s press conference, particularly his assessment of the timeframe for normalizing inflation with tariffs
After a summer of speculation, the US Federal Reserve (Fed) will unveil this Wednesday, September 17, a monetary policy decision that could redefine the trajectory of financial markets through year-end. This meeting is not a simple technical adjustment: it embodies all the tensions accumulated since Jerome Powell and the FOMC members paused their rate-cutting cycle last December. This may be the moment of the famous “pivot” investors have been waiting for since early 2025.
The underlying question is simple: will the Fed settle for a limited 25 basis point cut, or surprise with a more aggressive “jumbo cut”? The decision will not only concern the immediate level of rates but also the message sent to markets: the path of monetary policy for the remainder of 2025, consistency with inflation and employment projections, and above all, the balance of power among the 12 FOMC voting members. Recall that 7 votes out of 12 are needed to approve a rate cut, and Jerome Powell counts as only one vote among the 12.
In short, it’s not just a number but a trajectory of monetary policy. And it is this trajectory that will shape the year-end trend of risky assets in the stock market.
If Powell manages to open the door to clearer easing while remaining consistent with his latest macro forecasts, the market may finally gain the visibility it has been demanding. Otherwise, we risk staying in an uncertainty zone where every employment or inflation statistic reignites doubts. And in this game, the referee remains the same: the US 2-year yield. It is the US 2-year Treasury yield that best anticipates the upcoming path of the federal funds rate.
The S&P 500, the barometer of large caps, and the Russell 2000, more sensitive to domestic conditions, will hang on Powell’s words.
The Fed will update many macroeconomic data this Wednesday, but ultimately one factor will dominate: the “Fed Cut Path” – the number of rate cuts expected by year-end. This will be directly tied to the timeframe the Fed deems necessary to normalize inflation.
In short, the Fed’s decision on Wednesday, September 17, will shape the year-end stock market trend.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.