After the Fed's hawkish interest rate cut, the market plummets: Core analysis
The Fed's FOMC hawkish interest rate cut has landed, and the market has significantly corrected, with Bitcoin giving back all its gains within 12 hours before the meeting. This sharp decline is not due to a fundamental shift towards bearishness; the core reason is that the expectations before the meeting were too high, combined with multiple factors resonating together. $BTC
1. Core triggers of the sharp decline
1. Concentrated profit-taking: The expectation of an interest rate cut was fully priced in ahead of time, with previous market expectations of a cut reaching 95%. Last week, large traders built positions early, betting on liquidity easing, which drove the market up; after the Fed officially announced the rate cut and the monthly purchase of $40 billion in short-term government bonds, whales concentrated on cashing in profits, triggering the first round of selling.
2. Rising uncertainty over interest rate cuts: Powell's press conference sent tightening signals, mentioning a weak labor market and high inflation, while the dot plot shows only a high probability of one rate cut in 2026. The expectation of easing was dashed, and the formal start of the sharp decline occurred after the close of the US stock market. $ZEC
3. Earnings reports transmit bearish sentiment: Oracle's Q2 earnings report fell short of expectations, with adjusted revenue missing the target and capital expenditures increased, leading to a post-market stock price crash of over 11%, dragging down US stock futures; the market is worried that the AI bubble has peaked, and panic sentiment quickly transmitted from the stock market to the cryptocurrency market.
2. The essence of the sharp decline and long-term trends
1. Core logic of the sharp decline
- The expectation of an interest rate cut has been fully reflected in the price, and liquidity trading has been positioned ahead of time;
- Powell did not release strong easing signals, and concerns in the AI field have spread, triggering a wave of profit-taking.
2. Long-term trend remains unchanged
- The Fed has cut rates three times in a row, and in the next 30 days, it will start purchasing $40 billion in short-term government bonds monthly, a scale that may be maintained for several months;
- Rate hikes are not a baseline scenario, with the economy expected to grow steadily in 2026, and the actual weakness in the labor market leaves room for subsequent easing;
- The liquidity environment in 2026 is expected to be significantly better than in 2025, and this expectation has not yet fully reflected in current prices; the current decline is a case of expectations outpacing reality. $MDT #美联储FOMC会议 #美联储降息 #加密市场观察
