After the interest rate cut expectations are fully priced in, please keep this market risk reminder
At present, a certain heavyweight policy has been firmly established, but seasoned investors understand one principle: buy expectations, sell facts.
The script has never been absent. In today's market prices, most of the gains are inflated in advance for good news celebrations, as funds have already pushed expectations to the extreme. When the official announcement comes, one must be wary of the classic reversal where good news turning into bad news.
Instead of getting tangled in whether there will be a cut, the more critical factor is the direction of the Federal Reserve's statements.
If the Powell team hints that there will be more interest rate cut packages in the future, the market is likely to continue the celebration; but once the tone shifts to caution, emphasizing data dependence and gradual assessment, the situation will have to be reconsidered.
It is important to know that Powell's speeches come with a magnifying glass; even a half-hearted expression of hesitation may be interpreted by the market as a signal for a washout, triggering collective withdrawal of funds.
For ordinary investors, the most taboo thing now is to blindly chase high prices before the news materializes.
During the expectation fermentation stage, one can follow the market sentiment and have a taste, but at the critical moment of official release, one must be quicker in thought than in action.
After all, in the arena of capital games, maintaining one's rhythm and adhering to trading discipline is far more reliable than blindly getting excited by emotions.
Rather than betting on short-term fluctuations, it is better to prepare a response plan in advance to exit calmly when the market reverses.