The Fed paused — but markets are already positioning for the next move.
The January 28 FOMC meeting delivered a clear signal:
📌 Monetary policy is no longer on a preset path.
Everything now depends on incoming data, the balance of risks, and macro dynamics.
Here’s what actually matters from Powell’s message 👇
🧑💼 Labor market: stabilizing, not strong
Powell acknowledged that the labor market is no longer overheating.
Unemployment remains around 4.4%, job growth has weakened on a 3-month basis, and key indicators — hiring, layoffs, vacancies, wage growth — show little change.
The Fed sees balance, not momentum.
📦 Inflation: still elevated, but the source matters
Price pressure is now concentrated in goods and partially driven by tariffs.
Services inflation continues to cool.
This suggests inflation is becoming narrower — and potentially more temporary.
📉 Rates: we are close to neutral
Powell stated that the current policy rate (3.50–3.75%) is within the range of plausible neutral estimates.
Translation: the Fed no longer sees policy as clearly restrictive.
Future cuts are not scheduled, but not off the table either.
Decisions will be made meeting-by-meeting, based on data.
🏛 Politics and Fed independence
Powell carefully avoided political narratives and repeatedly emphasized institutional independence.
This was not just communication — it was a signal of credibility to the market.
📊 Market implications
• High long-term yields are already tightening financial conditions
• Gold benefits from macro uncertainty and real-rate expectations
• Crypto remains highly sensitive to liquidity expectations
• Equities stay supported — but increasingly dependent on inflation data
⏳ The real catalyst: March FOMC
Before the next meeting, we will get 2 CPI and 2 PPI releases
If disinflation continues (and leading indicators already point in that direction), the narrative will shift from:
“Will there be cuts?” → “How soon will they begin?”
