At 3 AM, the last tremor of the Federal Reserve this year has arrived; a rate cut is basically a given, but the real show is yet to come.
This is definitely an "hawkish rate cut", a move that feels like "sugar mixed with glass shards". The interest rate has been lowered, but Powell will certainly make it clear: this cut does not mean there will be another one next time. Want to cut rates again? Unless the job market collapses in front of me.
Why? Because even the Federal Reserve is in disarray. Out of the 12 voting members, 5 hawkish bigwigs clearly oppose the rate cut. Thus, this rate cut is more like a "divided compromise". The latest dot plot is likely to show that by 2026, at most there will be two cuts, and by the end of the year, the interest rate will still hover above 3%, the faucet won't be easily turned on wide.
Don't expect a 25 basis point cut to make Bitcoin take off instantly. The market has already digested this good news. The real risk lies in the Federal Reserve's "hawkish" statements which might suppress the market's enthusiastic expectations. If Powell speaks harshly, with a strong dollar, risk assets will tremble.
What should players do?
My view is straightforward: fasten your seatbelt, watch more, and act less.
Don't chase highs: if the news causes an instant surge, don't rush in impulsively; that is mostly a trap.
Reduce leverage: tonight's volatility will be immense, high-leverage contracts are like gambling with your life; surviving is the most important.
Watch the latter half of the night: the first hour after the resolution is filled with emotional chaos; the real direction will only become clear after Powell finishes his press conference and the market digests all the information. From 3 AM to 5 AM is the key to determining this week's trend.
Remember, the Federal Reserve is currently providing a "slow-release capsule", not a "emergency injection". A genuine bull market requires continuous liquidity expectations.
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