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3 Ways to Trade the September Fed Meeting (and What to Expect)
The Fed is cutting rates, but the real action comes from the dot plot and Powell’s tone. Here’s how to trade the most important event of the month.
Prop Trader Edge
September 16, 2025
Hey Prop Traders, here’s are some valuable tips, terms explained and prop firm news for September 15, 2025
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3 Ways to Trade the September Fed Meeting
The Federal Reserve is set to deliver its first rate cut of the year, and while the market has already priced in a 100% chance of a 25-basis-point cut, that’s not where the real action lies. The fireworks will come from the dot plot, inflation forecasts, and Fed Chair Jerome Powell’s press conference.
At 2:00 PM ET, the Fed will release its rate decision along with updated projections. By 2:30 PM, Powell will take the podium. If you’re trading live, the first 15 minutes of his Q&A are often the most market-moving.
Why the Dot Plot Matters
Back in June, the Fed’s dot plot projected two cuts in 2025 and two to three more in 2026. Yet, seven Fed officials didn’t see a single cut this year. That’s why even one adjustment to the 2025 outlook could ripple across markets.
Here’s what to watch:
50bp surprise cut → Very dollar bearish, stocks rally.
2025 projection stays at 2 cuts → Less dovish, dollar higher, stocks weaker.
2025 projection drops to 3 cuts (likely) while 2026 holds steady → Mildly dollar bearish.
2025 at 3 cuts + 2026 at 4-5 cuts → Dollar bearish, stock market positive.
Powell’s Tone
At Jackson Hole, Powell called the U.S. economy “resilient” but admitted inflation remains sticky and the labor market is in a “curious balance.” On Fed Day, every word he uses around inflation and future policy will shape expectations for not just this cut but the entire 2025 path.
🎯 How to Trade It
Proactive – Position ahead of the announcement if you’re confident (but scale back risk just before 2:00 PM).
Reactive – Wait for the release, then trade the continuation once the initial move is clear.
Stand Aside – If volatility feels untradeable, skip the chaos and look for cleaner setups in Asia or Europe.
⚡ Expect Market Reactions
Unchanged dot plot or inflation worries? → Dollar 🚀 higher.
More cuts and weaker growth? → Dollar ⬇️ lower, stocks rally.
By 3:00 PM, direction usually settles in and often carries across sessions.
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Fed Day is one of the most important trading events of the year. Whether you choose to trade ahead of the release, react after the news, or step aside, knowing how the dot plot and Powell’s words drive markets will give you an edge.
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