Does the Federal Reserve slap and then give a candy? Brother Yi breaks down hawkish rate cuts, and retail investors in the crypto circle respond this way
This week, the Federal Reserve's dramatic maneuvers have escalated directly, with rate cuts basically set in stone, but Powell is very likely to start playing the bad cop—this is what is often referred to in Wall Street circles as hawkish rate cuts.
What are hawkish rate cuts? Simply put, it’s a typical slap-and-candy scenario: on one hand, providing the market with rate cut benefits, while on the other hand, maintaining a stern face and delivering harsh words that it won’t be a precedent.
After all, there's been a lot of internal conflict within the Federal Reserve; one faction wants to continue easing to save the market, while another insists on tightening to prevent inflation. Old Powell's operation here is about finding a balance, first cutting rates and then hinting that there won’t be sustained easing in the future, to appease the opposition.
From an asset impact perspective, rate cuts are essentially a signal of liquidity injection, which is absolutely beneficial for assets like Bitcoin in the long term, but hawkish statements will splash cold water on the market, and short-term volatility will definitely increase. Don’t expect a continuous surge.
However, since the faucet has already been turned on, the general direction isn’t bad.
How should retail investors respond? Brother Yi teaches you three tricks: don’t chase highs or panic sell; the market tends to jump around easily before and after news, and acting rashly can lead to losses.
Keep your focus on the core of liquidity injection; interest rates are indeed falling, and money will always find a place to go, so hold on to core assets and ignore the noise.
Set aside enough cash; if hawkish speeches create deep pits in the market, it’s just the right time to buy in batches.
With rate cut expectations fully in play, you can’t enter the financial door in a hurry!
Making money in the crypto circle relies on strategy and patience. Follow Brother Yi for real-time signals on when to enter the market, and don’t get lost on the road to wealth!
