Fed Rate-Cut Hopes Fade — Markets Brace for High Rates

The Federal Reserve’s upcoming decision has investors on edge. Expectations of a quick rate cut have cooled as inflation remains sticky near 2.7% and the labor market stays strong around 4.4% unemployment. This combination signals that the Fed is likely to keep rates higher for longer.

Markets are now adjusting to the reality that a March rate cut is largely off the table. Traders are watching the Fed’s wording closely, looking for hints about future policy, while short-term volatility is expected around the announcement.

Investors are divided between defensive positioning and hoping for a surprise move. Safe-haven assets may benefit from uncertainty, while riskier markets could face pressure if high rates persist. The next few hours will reveal the Fed’s tone and market direction.

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