Is a rate cut equal to 'increase' really that simple?
Is it really that simple? 'Rate cuts = increases'? The Fed's interest rate decisions affect the crypto market through several channels. The first is the US dollar. A rate cut means a decrease in the yield of dollar-denominated assets, and funds will seek other destinations. When the dollar weakens, dollar-denominated assets (including BTC) tend to perform better. The second is liquidity. In a low interest rate environment, the cost of borrowing is low, and there is more money in the market, some of which will flow into risk assets. The bull market from 2020 to 2021 was largely a result of the Fed's unlimited quantitative easing. The third is risk appetite. When the Fed releases dovish signals, investors are more willing to take on risks, and funds flow from bonds and money market funds into stocks and cryptocurrencies; conversely, hawkish signals cause funds to flow back into safe assets.
"The Federal Reserve faces a typical dual mandate conflict"
The market holds its breath for the 'delayed judgment': September PCE will be revealed tonight. If inflation remains sticky, will it shake the consensus for a rate cut by the Federal Reserve next week? Wall Street expects that the Federal Reserve's preferred core PCE price index will rise by 2.8% year-on-year in September, potentially reaching the highest level since April 2024, highlighting sticky inflation. Nevertheless, due to significant pressure from weakening employment, the market still anticipates a 25 basis point rate cut by the Federal Reserve next week with a probability as high as 87%. Analysts believe that if PCE inflation meets expectations, rate cut expectations will strengthen, and the year-end Christmas rally is likely to continue. After experiencing a volatile November, U.S. stocks are approaching historical highs again. However, behind this rebound, investor sentiment is not easy: on one hand, inflation is slow to decline, and on the other hand, the job market is gradually cooling, with macro signals being contradictory.
#美国非农数据超预期 If you can't make money in the crypto space, then first learn to lose less! If you lose, you owe an apology to your family or you might consider jumping off a building or delivering takeout. 1. Position management: If you lack skills, don't go all in; if you're good at making profits, even ants are meat, no matter how much you invest, you'll make money. 2. Follow the trend, don’t follow the K-line! If the big trend is down, go short; if the big trend is up, go long! 3. Set a proper stop loss and execute it strictly. Set the stop loss below the support level or above the resistance level. If your stop loss is hit, it means you made a wrong decision. Many people stubbornly refuse to change and end up losing everything by averaging down. 4. If there’s no market and the trend hasn’t formed, don’t enter. If you can't control yourself, spend a few tens of U to play with altcoins. 5. Don’t invest large sums in altcoins unless you want to become a shareholder! If it’s not decentralized, it’s considered controllable. When you play with the market makers, what do you think your odds of winning are? 6. Avoid so-called projects; good projects are not for you. No amount of persuasion will change that. Instead of losing money, come learn some skills from me.
#美联储重启降息步伐 #比特币波动性 For the world, "protecting the market" has the Federal Reserve "surrendered"? "Last night, the eyes of people around the world were closely watching the opening of the U.S. stock market. If the situation was not good, investors would be ready to press the sell button and exit the market at any moment. Unexpectedly, the Federal Reserve surrendered first. Just two hours before the opening, New York Fed President Williams gave a speech: he indicated that there would be a possibility of interest rate cuts in the short term. Williams is the most "hawkish" senior official of the Federal Reserve, and his signals are equivalent to indicating that the Federal Reserve has one foot already in the rate-cutting path. Moreover, he also stated that the market is very optimistic about artificial intelligence and expects a period of strong growth. This is very clear; this hawkish official has come out to "protect the market" for U.S. stocks. There were other officials who also spoke out. Federal Reserve Vice Chairman Clarida similarly supported that AI has real profitability. He believes that the U.S. stock market is unlikely to repeat the scenario of the late 1990s Internet bubble crash. Federal Reserve Governor Mester was even more blunt, stating that if the vote becomes a key vote, he will support a 25 basis point rate cut. Federal Reserve officials have collectively taken a stand, openly supporting AI, releasing signals for rate cuts. As a result of this strong influence, the probability of a rate cut in December has increased to over 50%, while before it was only 27%. After they spoke, the price of gold rose nearly $50, avoiding further declines, and BTC also temporarily halted its drop, hovering around $83,000. Subsequently, the three major U.S. stock indices opened higher and quickly rose in the midst of fluctuations. Ultimately, the U.S. stock market did not disappoint. If it maintains its upward or stable trend, this global storm may be calmed. If it cannot hold on and falls back down at the end of the trading session, then the market may enter an unimaginable situation. So, what about next week? Will U.S. stocks and cryptocurrencies rebound? What do you think? ?