The U.S. government shutdown continues to intensify interest rate cut expectations, while the cryptocurrency market awaits a shift in liquidity.
The U.S. federal government shutdown has entered its 23rd day, and the ongoing data void is significantly altering market expectations for Federal Reserve policy.
Due to the suspension of key economic indicators such as the September employment report and inflation data, even the Federal Reserve itself cannot access the crucial ADP private sector employment data, leading to a rapid increase in bets on interest rate cuts.
According to analysis from The Wall Street Journal and Kobeissi Letter, the longer the government shutdown persists, the greater the pressure on the Federal Reserve to adopt a dovish stance.
Currently, CME futures market data show that traders widely expect the Federal Reserve to cut rates by 25 basis points at the October 29 meeting, with a probability as high as 96.7%.
Even more noteworthy is that market expectations for another rate cut in December have soared to 96.3%, and expectations for a third rate cut in January next year are nearing 60%.
This expectation of a policy shift is reshaping the attractiveness of various assets. Analysts point out that once the Federal Reserve continues the rate cut cycle, the yields on traditional safe assets such as savings accounts and government bonds will decline, which may prompt funds seeking higher returns to shift towards risk assets like cryptocurrencies.
At the same time, the decrease in borrowing costs and increase in liquidity resulting from rate cuts will create a more favorable monetary environment for the cryptocurrency market.
Despite the optimistic policy outlook, the current cryptocurrency market remains in a consolidation phase. In the past 24 hours, the total market cap has remained around $3.75 trillion;
Bitcoin has been oscillating narrowly near the key level of $108,000, failing to achieve a solid breakthrough of $110,000;
Ethereum has also shown weakness, failing to reclaim the $4,000 mark after three dips to $3,700, while most altcoins continue to experience slow declines.
Market observers believe that the divergence between current policy expectations and market performance will not last long. As economist Raoul Pal has pointed out, the liquidity contraction caused by the government shutdown is just a temporary phenomenon, and once the situation clarifies, cryptocurrencies are likely to once again become the primary target for liquidity inflows.
In summary, as the year-end approaches, the combination of historic seasonal effects and potential policy shifts may create conditions for the next market rally.
#美联储降息预期