Traders eye Fed and Middle East as risk appetite cools ahead rate decision
Traders are cutting risk ahead of the Feds April decision as Middle East tensions, a blocked Strait of Hormuz and fragile crypto sentiment keep markets on edge.Pepperstone‘s Michael Brown says traders are cutting risk before the Federal Reserve’s April decision.Geopolitical tensions and a blocked Strait of Hormuz add to caution across global markets.Derivatives data show markets largely positioned for the Fed to hold rates steady into year-end. Traders are trimming exposure to risk assets ahead of the Federal Reserves latest interest rate decision, with Pepperstone analyst Michael Brown warning that many participants “will want to cut back on their positions” before the announcement at 2 a.m. Beijing time on April 30. Fed decision looms as traders de‑risk According to a recent Pepperstone FOMC preview, money markets are pricing virtually no chance of a policy move, with the federal funds rate expected to stay in a 3.50%–3.75% range and only around 12 basis points of easing priced by year‑end, implying roughly an even probability of just one 25‑basis‑point cut in 2026. In crypto markets, earlier this month traders have already been fading aggressive Fed‑cut bets for 2026 as U.S. unemployment fell to 4.3%, tempering the liquidity story for assets like Bitcoin and Ethereum. Middle East conflict