Fed Giveth, Stock Market Taketh

FED Cut Rates by 0.25%, As Widely Expected

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BraVoCycles Newsletter
September 18, 2025

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  • In Tuesday’s Market Twists & Turns Pro, we examined intermediate-term US Dollar Index (DXY) and EURUSD prospects.

  • Today, we will examine a long-term DXY Elliott Wave chart.

  • We will also examine the Semiconductor Index ETF, SMH, and the largest semiconductor and US stock, Nvidia (NVDA), in the latest YouTube video (link below). 

  • In the Pro newsletter, we will do a deeper dive into the semiconductor sector.

  • The FED cut rates by 0.25%, as widely expected.

  • In their quarterly economic projections, the central bankers said they expect the fed-funds rate to be another 50 basis points lower by the end of the year. 

  • Presumably that means 0.25-percentage-point cuts at its final two meetings of 2025 in late October and early December.

  • Not only that, but the Fed members think inflation will be running "hot" – and expect to cut rates anyway.

  • That could add tailwind to already rising inflation.

  • FED is between a rock and a hard place because: 1) inflation cycle is likely up, while 2) jobs are weakening, consumers are weakening, and there are also some problematic issues with banks, in part due to non-performing credit card and card loans and mortgages.

  • How are is this cut and possible subsequent FED’s rate decisions going to impact the global liquidity?

Long-Term US Dollar Index (DXY) EW Chart

  • Everyone and his uncle is bearish or short USD  

  • The break of the trendline will reinforce the bearishness and may create a Bear Trap 

  • (C)=(A) is an ideal target, but not absolutely required.

  • There were several spikes into the FOMC minutes release at 2 pm New York time, followed by sharp reversals after 2 pm. 

For your entertainment, read Super Grok’s analysis of my DXY post on Tuesday evening:

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