Fedspeak Volatility Ahead: Will July's FOMC Meeting Surprise Markets?

The Federal Reserve's FOMC meeting is set to take place on July 29, and market expectations are that interest rates will remain unchanged in a 10-2 vote. The baseline expectation is that the Fed will keep interest rates in the 3.50-3.75% range, with a potential September hike firmly on the table.

According to a Reuters poll, all 104 economists expect the Fed to hold interest rates in the specified range, while traders are pricing in about a 1-in-3 chance of a hike this week. This discrepancy between expectations may lead to volatility if the Fed surprises with an immediate rate hike.

A hawkish tone from the Fed could cause the Nasdaq 100 to break below its current support level at 27,750 and potentially retest levels around 26,800 or 25,900. On the other hand, a neutral outlook might lead to a relief rally in the index, with previous-support-turned-resistance at 28,250 as a potential target.