The FOMC does not like to surprise the markets. There are, however, strong odds the FOMC will cut in September and that is what the market will focus on in the press conference.
However, we already know what the FOMC will say and what it will do. Why? Because while many people think the market reacts to the FOMC, the reality may be more that the FOMC reacts to the market instead. In the first chart I show you three lines: Fed Funds in blue, 4-month ahead Fed Funds Futures in white, and 12-month ahead Fed Funds Futures in orange.
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