Sergey Diakov
⬤ Expectations around Federal Reserve monetary policy are shifting fast. Markets are pricing in rate cuts while alternative inflation trackers like Truflation show rapid cooling. The conversation across macro markets has moved from whether cuts will happen to how quickly the Fed might ease.
⬤ Futures positioning and macro chatter suggest traders are betting on lower borrowing costs ahead. We've seen comparable setups in markets pricing rate cuts and cut expectations after inflation data, where pricing mechanisms reflected policy shifts before official announcements. These signals typically surface when inflation indicators soften and liquidity expectations brighten.
⬤ There's also mounting macro pressure around policy direction. Political messaging and leadership outlook are being read as supportive of easier financial conditions—similar narratives appeared when inflation cooling below target influenced policy debate. The alignment of cooling inflation data and bullish market positioning strengthens expectations, though timing remains uncertain.
⬤ Interest rate expectations ripple across nearly every asset class because they dictate liquidity conditions and risk appetite. Right now, the real question isn't whether easing is coming—it's how quickly the Fed will actually pull the trigger across the economic cycle.
Sergey Diakov
