Scenarios for the FOMC Meeting
Wall Street is anticipating the Fed interest rate announcement. Given the core Consumer Price Index (CPI) remaining slightly above the 2% target, economists are split on the speed of upcoming cuts.
Scenario A: Hawkish Pause (US Dollar Bullish)
If the Fed maintains rates and signals fewer cuts for the rest of the year, the US Dollar (DXY) will strengthen. EUR/USD is expected to break below 1.0700, and Gold could face sell-offs targeting $2,250.
Scenario B: Dovish Cut (Gold and Crypto Bullish)
If the Fed cuts rates by 25 basis points and acknowledges cooling labor markets, we expect capital to rotate out of cash. Under this scenario, Gold targets $2,450 and Bitcoin is positioned to break its consolidation range upwards.