Will the Fed Cut Interest Rates Again? Tonight's Data Is Key
Original Article Title: "Will the Fed Cut Rates Again? Tonight's Data Is Key"
Original Article Author: Dong Jing, Wall Street News
Caught between geopolitical conflicts and a rebound in inflation, the market's expectations for a Fed rate cut are experiencing drastic swings. The core of the current market debate is whether the soaring energy prices will lead to sustained inflation or will bite back consumer demand, forcing the Fed to cut rates?
On April 21, according to Windseeker Trading Desk, Citigroup provided clear reasons in its latest research report for a rate cut, believing that the oil supply disruption is just a temporary disturbance, the rate cut path may be bumpy but the direction is clear; while Deutsche Bank poured cold water, warning that the Fed's policy is already neutral and is expected to maintain the current rate indefinitely.
Amid the clash of views between the two major investment banks, the upcoming March retail sales data will be the key litmus test to break the deadlock. This data will not only reveal the true impact of high oil prices on core consumption but will also directly determine the Fed's policy path in the near term.
Citigroup: Geopolitical Disturbance Is Temporary, Overall Rate Cut Direction Unchanged
Despite the ongoing impact of geopolitical developments on the market, Citigroup remains firm in its belief that the path to lower rates and a more dovish Fed policy still exists.
The core logic of this assessment is: the impact of the Strait of Hormuz situation on oil supply is increasingly likely to be brief rather than a sustained source of inflation. On April 18, there were reports that the Strait of Hormuz would reopen, although later questioned, both the bond yields and oil prices have retraced from Thursday's highs and are maintained at lower levels—a signal that the market is pricing in the scenario of a "temporary impact."
The research report pointed out that Citigroup's logic chain is clear: Geopolitical conflict is temporary → Oil price impact is not sustained → Inflation pressure is not spreading → The Fed has the conditions to return to the rate-cutting track.
In addition, a series of underlying economic data tracked by Citigroup indicate that a subtle change is taking place in the macroeconomic financial environment:
Liquidity and Financial Conditions: The Fed's reverse repo (RRP) volume has dropped significantly to near-zero levels; at the same time, recent financial conditions are tightening, and mortgage rates are once again showing an upward trend.


Labor Market: Indeed job vacancy data have recently shown a sideways consolidation trend, although initial jobless claims remain overall low.

Funding Conditions: As of now, this year's individual tax refunds (cumulatively in billion-dollar terms) are slightly higher than the same period last year.

Tonight's Litmus Test: Why is March's 'Control Group' Retail Sales Data Key?
Amidst interest rate cut expectations, the upcoming March retail sales data will provide investors with firsthand clues, revealing to what extent the soaring gasoline prices have cut into consumers' spending on other categories of goods.
Citi emphasizes that investors must "look beneath the surface" when interpreting this data. Due to the rising gas prices, the nominal retail sales for March are bound to show a surge. However, what truly guides the Fed's policy direction is the "control group" sales data.
The report highlights that this data excludes sales from gas stations and certain specific categories, offering a more genuine and accurate reflection of whether high oil prices have led to a softening of consumer spending in other areas. If the 'control group' data unexpectedly weakens, it will powerfully confirm that high inflation is biting back demand, thereby providing crucial data support for the Fed's rate cut logic.
Deutsche Bank's Cold Water: Policy at Neutral, Fed May Stand Pat Indefinitely
In stark contrast to Citi's optimistic outlook, Deutsche Bank has given an extremely cautious assessment of the rate cut prospects. In a research report, Deutsche Bank explicitly states that the Fed is expected to maintain the current rate indefinitely as the current policy is already at a neutral stance.
Deutsche Bank's pessimistic outlook is primarily based on the following core points:
Inflation Ebbing: Widespread inflation metrics indicate that the US's progress in combating inflation has stalled.

Official Hawkish Shift: Deutsche Bank's tracking of Fed officials' speeches shows that officials like Waller and Miran have adopted a more hawkish tone, while most officials continue to believe the current policy stance is "well positioned." Specifically:
· Waller: Turning hawkish. He notes that an extended Middle East conflict would obstruct the rate-cut path; a series of shocks (tariffs plus oil prices) could trigger a more sustained inflation rise; he also emphasizes that core inflation, excluding the tariff impact, is close to 2%, and there's fragility in the labor market;
· Miran: Currently the most dovish voice, supporting 3 or even 4 rate cuts this year, believing that the outlook for inflation after 12 to 18 months remains unchanged by the war, and the oil price shock is temporary;
· Williams: Believes that the policy is "just where it needs to be," raising the inflation forecast for 2026 to around 2.75% and lowering the economic growth forecast for 2026 to 2% to 2.5%;
· Hammack: Clearly stated that interest rates will "remain unchanged for a considerable period of time";
· Goolsbee: Warned that if oil prices continue to stay at $90 per barrel, it may spread to other prices; the probability of further rate cuts in 2026 is low, and rate cuts may need to wait until 2027;
· Daly: Believes that the current policy is in a "very good place," and if the oil price shock continues until the end of the year, market pricing shifting to "zero rate cuts" is not surprising.
The minutes of the Fed's March meeting also showed that the vast majority of officials believe that the process of inflation returning to the 2% target will be delayed; some officials even discussed the need to include "two-way risk" language in the meeting statement, implying that the possibility of rate hikes is not completely ruled out.
Deutsche Bank's hawk-dove rating of Fed officials shows that the average score of the 2026 voting committee is 2.8 (with 1 being most dovish and 5 being most hawkish), leaning slightly dovish towards neutral, but dovish voices are clearly in the minority.

Market Pricing Completely Reversed: Faced with persistent inflation pressures and strong economic resilience, market expectations have undergone a dramatic shift. According to Deutsche Bank's data, current market pricing expects "zero rate cuts" for the entire year 2026, with a rate cut not expected until the summer of 2027.

Deutsche Bank expects that, in the base case scenario, the federal funds rate will remain at 3.63% throughout 2026 to 2028, with no rate cuts throughout the year.
Original Article Link
You may also like

Morning Report | OpenAI has submitted an S-1 registration statement draft to the U.S. SEC; Morpho completes $175 million financing

Morning Report | BitMine increased its holdings by 126,971 ETH last week; trader Eugene announced his exit from the crypto market

Wang Chuan: How can one not feel anxious after the neighbor Old Wang made thirty times profit by investing in storage stocks? (Seven) - A quarter-century cycle

Cryptocurrency CEXs are flocking to sell US stocks, and traditional brokerages are facing an "uninvited guest."

$75 billion in foreign capital has fled, and South Korean retail investors have absorbed it all using leverage

Japan’s Three Megabanks Plan Joint Stablecoin Issuance in Fiscal 2026
MUFG, SMBC, and Mizuho reportedly plan to jointly issue fiat-pegged stablecoins in fiscal 2026, signaling Japan’s growing push into bank-led digital payment infrastructure.

Humanity Discloses H Token Dual-Chain Attack Details, With Losses on Ethereum and BSC Exceeding $36 Million
Humanity said the H token attack across Ethereum and BSC caused more than $36 million in losses after leaked ProxyAdmin keys enabled malicious contract upgrades and token minting.

White House Discusses CLARITY Act With Law Enforcement Ahead of Senate Vote
The White House discussed the CLARITY Act with law enforcement ahead of a Senate vote, focusing on illicit finance risks and developer protections.

Bitcoin Trading Guide 2026: Strategies for Experienced Traders

What Is XAUT and PAXG? Why Tokenized Gold Is Booming in 2026

Will the SpaceX IPO Hurt Bitcoin? Here's What Traders Are Watching

Foreign selling in the South Korean stock market accelerates, with cumulative net sales reportedly reaching $75 billion this year
On June 9, The Kobeissi Letter, citing Goldman Sachs data, reported that global investors are selling South Korean stocks at an unusually rapid pace. In the latest trading session, foreign investors sold about $801 million worth of Kospi constituent stocks again; total foreign outflows last week reached about $10 billion, and the market has been in net foreign selling on nearly every trading day over the past month. According to the data cited in the report, foreign investors have sold about $75 billion worth of South Korean stocks so far this year. Meanwhile, South Korean retail and institutional investors together recorded roughly $69 billion in net buying over the same period, suggesting that the market’s main buying support has come from domestic capital rather than returning overseas funds. The information currently disclosed still mainly comes from The Kobeissi Letter’s retelling and Goldman Sachs data summaries, while public details on the statistical period and the specific definition of “selling” remain relatively limited.

Fortune Warns of Strategy’s Financing Structure Risks as Bitcoin Premium Narrows
Fortune warned that Strategy’s Bitcoin treasury model faces growing financing risks as MSTR’s net asset premium narrows and preferred stock dividend pressure increases.

Ferrari Challenge Le Mans: Carl Moon to Dominate in WEEX Livery

Sahara AI Responds to SAHARA’s Sharp Drop: No Contract or Product Security Issues Found, Internal Investigation Underway
Sahara AI responded to SAHARA’s 60% price drop, saying no token contract or product security issues have been found and an internal investigation is underway.

WEEX Deposit/Withdrawal Dynamic Island: Your Asset Status, Always in Sight

Scaling Crypto Derivatives: The Digital Asset Infrastructure Behind High-Volume Trading
In the fast-moving digital asset ecosystem, derivatives platforms face an extreme architectural test. High-leverage futures markets demand more than just standard security—they require absolute operational precision, zero-latency matching engines, and ironclad structural scalability, all while navigating intense market volatility.
As global platforms scale to meet these demands, the industry is shifting away from rigid, monolithic setups toward a more agile, "decoupled" infrastructure philosophy.
The Blueprint for High-Volume Copy TradingFor elite global exchanges like WEEX (founded in 2018), this architectural choice becomes critical when scaling high-volume retail features like social copy trading. When thousands of users automatically mirror the real-time strategies of elite traders simultaneously, it triggers sudden, monumental spikes in concurrent transactional volume.
To prevent execution latency or settlement bottlenecks during these peak volatility events, a platform's primary engine must remain entirely dedicated to risk management, copy-trade synchronization, and order matching.
The Architectural Rule: New-generation platforms must separate front-end user execution engines from heavy backend infrastructural overhead to eliminate operational friction.
By separating these layers, platforms can maintain complete sovereignty over their trading environments and user experiences while strategically aligning with institutional-grade infrastructure ecosystems. This strategic framework allows modern exchanges to leverage advanced Digital Asset Custody infrastructure such as Cobo’s behind the scenes, ensuring that backend wallet management scales elastically alongside trading spikes.
Capitalizing on Market Momentum and 400× LeverageIn a derivatives arena where platforms offer up to 400× leverage on perpetual contracts, capital efficiency and market agility are core business metrics. To capture market momentum, an exchange needs the ability to rapidly expand its asset offerings, supporting everything from legacy crypto assets to sudden, trending altcoins across a massive library of trading pairs.
Adopting a flexible, scalable Wallet-as-a-Service (WaaS) solution such as Cobo’s could completely rewrite the development timeline for high-growth exchanges. Instead of spending months of engineering capital building out custom backend wallet architectures for every new blockchain network, platforms can deploy localized infrastructure in days.
This agility allows platforms to instantly scale their listings to over a thousand trading pairs without compromising security or delaying time-to-market. It mirrors the exact operational advantages seen during high-velocity market events, similar to how advanced wallet infrastructure empowers platforms during sudden asset surges; allowing exchanges to pass that speed and liquidity directly to their global user base.
A Mature Foundation for GrowthThe synergy between trusted infrastructure ecosystems and global trading platforms represents the natural evolution of a maturing crypto market. As WEEX continues to scale its global spot and derivatives offerings for over 6 million users, adopting robust backend paradigms proves that platforms no longer have to compromise between cutting-edge trading velocity and uncompromised structural security.

Get Paid to Onboard? Try WEEX’s New Homepage with Rewards for Registration, Deposit & Trade
Morning Report | OpenAI has submitted an S-1 registration statement draft to the U.S. SEC; Morpho completes $175 million financing
Morning Report | BitMine increased its holdings by 126,971 ETH last week; trader Eugene announced his exit from the crypto market
Wang Chuan: How can one not feel anxious after the neighbor Old Wang made thirty times profit by investing in storage stocks? (Seven) - A quarter-century cycle
Cryptocurrency CEXs are flocking to sell US stocks, and traditional brokerages are facing an "uninvited guest."
$75 billion in foreign capital has fled, and South Korean retail investors have absorbed it all using leverage
Japan’s Three Megabanks Plan Joint Stablecoin Issuance in Fiscal 2026
MUFG, SMBC, and Mizuho reportedly plan to jointly issue fiat-pegged stablecoins in fiscal 2026, signaling Japan’s growing push into bank-led digital payment infrastructure.
