The Federal Open Market Committee kept interest rates unchanged and retained an easing bias in its statement. Four members dissented, the highest number since the early 1990s.<\/p>\n
The statement text did not change, and some members wanted clearer two-sided guidance for future rate decisions. The majority kept the wording, so the easing bias remained.<\/p>\n
ABN AMRO expects the Federal Reserve to keep the federal funds rate steady until the end of the year. It then forecasts moderate easing starting with a 25bps cut in December.<\/p>\n
ABN AMRO projects another 25bps cut per quarter after that. It expects the policy rate to reach a 2.75\u20133.00% range by June, described as the lower end of neutral.<\/p>\n
Jerome Powell said conditions could look very different by the June meeting. The article states it was created with the help of an Artificial Intelligence tool and reviewed by an editor.<\/p>\n
The Federal Reserve’s decision to hold rates, despite a level of dissent not seen since the early 1990s, points to a period of consolidation for the next few weeks. We believe this favors strategies that capitalize on range-bound interest rates, such as selling short-term strangles on SOFR futures. This allows us to collect premium while the committee remains in its “wait-and-see” mode ahead of the pivotal June meeting.<\/p>\n
This cautious stance is reinforced by recent economic data, with the March 2026 CPI report showing core inflation remains sticky at 3.1%, preventing any rush to cut rates. Meanwhile, the latest jobs report indicated a cooling but still resilient labor market, giving the Fed cover to hold steady. This backdrop of conflicting signals supports the view that rates will remain unchanged in the immediate term.<\/p>\n
All attention is now on the June meeting, which was explicitly highlighted as a point where the outlook could significantly change. We should view this as a major event risk and consider purchasing longer-dated volatility through options that expire in July. The current implied volatility for post-June contracts seems to underprice the potential for a decisive shift in policy guidance.<\/p>\n
This holding pattern is reminiscent of the market’s incorrect positioning for rate cuts back in mid-2025, which ultimately led to a sharp unwind. Given that history and the current divisions within the FOMC, we see value in yield curve trades that bet on rates staying higher for longer than many expect. A yield curve flattener, using Treasury note futures, could perform well if incoming data forces the Fed to maintain its restrictive stance through the summer.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Fed held rates steady, kept easing bias; four dissents. ABN AMRO sees cuts starting December, continuing quarterly.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-46324","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46324","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=46324"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46324\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=46324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=46324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=46324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}