$ASR $TST 🔥🔥🔥This Thursday early morning, the Federal Reserve's interest rate meeting is about to start. It is basically stable that there will be no rate cuts in May, and everyone is focusing on June and July, hoping for a turnaround. CME data shows that the probability of no rate cuts in May is as high as 97.6%, and the market has already placed its bets on June. Recently, with GDP and non-farm payroll data released, everyone feels that the Fed will not be in a hurry to cut rates in the short term. Anyway, the market has already digested the idea of no rate cuts, which isn’t considered a negative. But retail investors are anxiously waiting for Powell to speak and see what he has to say.
Recently, the market has been guessing when the Federal Reserve will stop tapering, it's like opening a blind box. The more reliable speculation is that it might stop in June or July. But it's important to understand that even if tapering stops, for the Fed to start injecting money back into the market, it would take a major economic disturbance.
It needs to be made clear that balance sheet expansion and QE are not the same thing. Balance sheet expansion is like slowly replenishing water to the market, while QE is like directly putting the 'emergency breathing machine' on. With interest rates still so high at 4.5%, unless the economy collapses, there’s no need for such a harsh measure like QE. Historically, the fastest rate cuts took 14 months, and looking at the current situation, the economy isn't that bad yet.
However, if Trump intervenes, then anything could happen. Trump loves to create new tricks, ultimately just looking for ways to inject liquidity into the market. Whether it's normal balance sheet expansion or playing tricks, as long as there's liquidity, it's good news. A little liquidity is better than pulling it away. At that point, when hot money floods in, risk assets like the stock market and cryptocurrency market will definitely soar, and that’s the cornerstone of a bull market!
From ICO, DEFI to NFT, Gamefi, then to the metaverse, MEME (which appeared in 2020), and AI (which started gaining popularity in early 2023), and now inscriptions, what’s next? Payfi, RWA? AI and MEME will definitely continue to be popular. Optimistically, market liquidity may pick up in the second half of the year. So once the American meeting concludes, we need to closely watch the market!
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