No need to guess! Federal Reserve officials have made it clear: interest rate cuts are definitely coming this year, but don’t expect it too soon.

Chicago Fed President Goolsbee recently confirmed this—rate cuts are on the agenda, which is a reassuring signal for the market. However, the subsequent twist is also quite sobering: everything depends on the data. If hard indicators like inflation and employment don’t show significant progress, the rate cut will have to be delayed.

This statement mainly aims to dampen the dreams of those aggressive traders. They previously bet that the Fed would cut rates sharply in March, but now it seems the Fed’s stance is: a turn is definitely coming, but the pace must be steady and gradual. Want to see them act impatiently? The probability is decreasing.

For us investors, what’s the reality? Volatility will be the norm in the coming months. The dollar and U.S. Treasury yields will fluctuate until the market clarifies the next steps.

Key things to watch:

✅ The wording of the Fed meeting statement at the end of January, to see if any new signals are released;

✅ Upcoming inflation data, to judge whether the price decline is stable and reliable;

✅ How geopolitical situations evolve, and whether they will push energy costs higher again.

Ultimately, the story of rate cuts will continue this year, but how each step unfolds will ultimately depend on the data.