(BTC changes on the 16th of this month)
Powell's unexpected dovish comments really caught people off guard.
The Federal Reserve this time lowered interest rates by 25 basis points as expected, and also announced that it will purchase 40 billion US dollars of government bonds within the next 30 days, which is a real expansion of the balance sheet.
Looking at Powell again, the press conference at three thirty just started and it was quite neutral.
First, the labor market is declining, then it mentions that inflation has upward risks, and it also says that it is uncertain whether interest rates will be lowered in the future, there are risks on both sides.
Everyone thinks he is being evasive and trying to smooth things over, but after a while, he suddenly shifted his tone and directly made dovish remarks.
Recently, it has been said that the employment growth has been exaggerated, with 60,000 jobs; the cooling of the labor market is happening much faster than expected, and the unemployment rate may need to rise by another 0.1 to 0.2 percentage points.
It was also said that inflation has slightly decreased, and no decision has been made regarding interest rate cuts in the January meeting; it will depend on the data.
More importantly, he said that there are no signs from the long-term interest rates indicating concerns about inflation. He also emphasized that there are significant downward risks in the labor market.
Once the term 'significant' is mentioned, the dovish signal is directly maximized.
However, Powell stated that we need to rely on the data. In the next few days, there will soon be significant data released.
On the 16th, there will be the U.S. non-farm payroll data, and on the 18th, it will be the U.S. CPI price index for November.
These two are related to employment and inflation, which are core references for the Fed's subsequent interest rate cuts.
Before these two pieces of data are released, the market will definitely not dare to rise recklessly; what if the data is unexpectedly strong?
Additionally, there is another matter to pay attention to: on the 19th, the Bank of Japan will decide whether to raise interest rates; if they only raise by 25 basis points, that will be fine, as it is already largely digested in the market expectations.
So, at the meeting, they will announce that they intend to raise interest rates continuously, which exceeds expectations. Although the probability is not high, the market still needs to be cautious.
Therefore, the upcoming market environment will likely see BTC in a volatile trend.
Subsequently, regardless of any changes in data or new policy announcements, I will synchronize with everyone at the first opportunity, so please stay tuned.
