High volatility is expected today, Friday, with delayed Core PCE inflation data at 8:30 AM EST and 10:00 AM EST, crucial after mixed labor signals and a government shutdown. Markets anticipate sticky inflation, with an upside surprise potentially undermining rate cut bets. Next Wednesday, the FOMC decision at 2:00 PM EST, followed by Powell's press conference at 2:30 PM EST, is paramount. Despite an 87% probability of a rate cut, significant Fed divisions exist, making policy guidance critical. Tuesday's ADP and JOLTS, and Thursday's PPI and jobless claims, will further shape the rate outlook.
Traders should brace for significant swings around today's PCE releases and next Wednesday's Fed announcements, particularly given divided FOMC sentiment. Position carefully, as any hawkish or dovish surprises from inflation or the Fed's forward guidance could trigger sharp market reactions in rate-sensitive assets and the USD.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.