At 2 AM, the new Fed Chair Waller's 'debut' shook things up. Although interest rates remain unchanged (3.5%-3.75%), the signals from the dot plot are downright 'super hawkish': out of 18 officials, a full half (9) expect further rate hikes before the end of the year!
Translation in plain speak:
Rate cuts? Don't hold your breath: the market was previously fantasizing about rate cuts this year, but now it's been made clear that this door is not just closed, it might even get a 'rate hike' boot as it shuts!
Inflation has become a real thorn in the side: Waller has made it clear that achieving the 2% inflation target is 'firm, consistent, and clear.' This means that as long as inflation stays stubborn, the Fed will keep wielding the axe, and global liquidity is about to be drained again.
Washout signal: As a result, US stocks and gold have all tanked. In the crypto space, a typical risk asset, the big players love to use this 'rate hike expectation' to dump and shake out over-leveraged retail traders.
A retail trader’s soul-searching question:
The policy has completely flipped, are you still holding onto long positions? Or are you ready with your bullets, waiting for that big wick to snatch up some bargains?
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