Market participants are adjusting their expectations ahead of the FOMC decision, with a common pricing for a 25bp move, despite a recent inclination towards a 50bp cut.
Historically, the FOMC has rarely deviated from market pricing in 'Fed week', making any shift in rates highly anticipated by market players.
Current macro conditions suggest that a 50bp cut is unwarranted as inflation remains above the target, unemployment is low, and growth has been stable.
The focus should be on the guidance for future policy adjustments to return rates to a neutral setting rather than solely on the immediate rate change.
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