Tonight at 3 a.m., the Federal Reserve is expected to take major action, but this time it might be different.

Cut by 25 basis points? The market has long guessed that. The key is how they will cut — there’s a high chance of a “cut and then dampening” approach. They might give a little, but imply that you shouldn’t expect many more chances. The policy thresholds are actually slowly being raised.

The Federal Reserve’s current situation is quite delicate: signals from the employment side aren’t great, layoffs are increasing, new job creation is shrinking, and some officials have openly said that employment faces downward pressure. But on the other hand? Inflation remains a persistent problem. The core PCE index is stuck at 2.8%, and combined with the impact of tariffs, inflationary pressures have not eased.

So this meeting isn’t just about whether they will cut or not, it’s also about listening to how they will comment on the future. Market volatility might be in these details.