US100 is up 1% today, compared to a 0.5% gain just before the decision, largely offsetting yesterday’s losses. U.S. indices are reacting positively to "bad news." The Fed has significantly lowered its economic growth forecasts and highlighted high uncertainty in its statement. Markets interpret this as a signal for potential rate cuts, even though the Fed itself has not changed its projections for the number of cuts this year or in the coming years.
At the same time, the Fed is adjusting its balance sheet reduction plans, now intending to phase out only $5 billion in Treasuries per month, down from the previous $25 billion target. However, it will maintain the pace of MBS reductions at $35 billion per month.
US100 is rebounding, largely recovering yesterday’s losses. Powell's speech is coming up shortly, which could still have a significant impact on the market.
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