The Fed is back as the market’s center of gravity

The “quick rate cuts” scenario is losing strength. Several desks are pushing back their easing expectations, with some now considering that the Fed may stay restrictive much longer than previously priced.

Why it matters

When US yields rise, three assets react quickly: growth stocks, the dollar, and high-beta macro assets such as gold or Bitcoin.

The key question is not only “will the Fed cut?”. It is: does the market still price too many cuts? If yes, the correction can start in bonds before hitting equities.

Levels to watch

• US 10Y: a durable break above recent stress zones would pressure Nasdaq again.
• DXY: a stronger dollar complicates the rebound in commodities and emerging-market FX.
• S&P 500 / Nasdaq: beware sessions where indices rise while yields also rise; that mix rarely stays stable for long.

TradingParadiz read

For traders, the main risk is a market still using an old narrative — “cuts are coming” — while the data says otherwise. As long as inflation remains sticky, equity rebounds can remain fragile.

Sources monitored: Reuters/Yahoo Finance, US bond market, Fed funds pricing, DXY.

None of this is investment advice.