Recently, the crypto space seems to have been pressed on the 'excitation button', with rumors everywhere about the Federal Reserve cutting rates in September, even Trump has come out shouting 'rate cuts are coming soon', and many are gearing up for a bull market. But let me pour some cold water on this—don't get too excited just yet; there could be a lot of fluff around this rate cut!
First, let's look at the Fed's attitude, which shows no signs of easing. Although Trump has placed a few dovish people in there, the core figures like Powell are crystal clear in their minds; they may not say it outright, but their actions are marked by 'let's act based on inflation'. The previous lessons from fluctuating inflation are right there; how could they dare to cut rates easily? If inflation doesn't truly come down and they release liquidity, all previous controls would be in vain, and the Fed won't joke around with the market's foundation. The speculative sentiment in the crypto space is insignificant in their eyes; stabilizing inflation is more important than anything else.
Looking at inflation, this 'hard nut' isn't so easy to crack. CPI and PPI appear to have declined somewhat, but core inflation remains tight, indicating that the foundation for rising prices hasn't broken. If they really dare to cut rates in September, it's like adding fuel to the fire of rising inflation; the policies might flip-flop, and the crypto space would truly face a 'roller coaster', with risks much greater than now.
Furthermore, employment data does not leave room for rate cuts. The employment data from the US stock market is quite bright, wages are still rising, and the economy hasn't reached a 'needs saving' level. The Fed usually cuts rates to provide emergency support, but there's not even a hint of 'emergency' now, so why cut rates? Without loose dollar liquidity, the crypto space relying on external funds to rally is essentially a pipe dream.
Not to mention that the market has long treated 'rate cuts' as a speculative bait. Many rush in with the idea that 'rate cuts must lead to a rise', and funds follow suit in speculation, inflating the bubble. The Fed has repeatedly emphasized 'let's look at the data', which is actually to cool the market; don’t be foolishly chasing after rising prices and cutting losses, or you might end up being the one sheared.
With the global situation being such a mess, the Federal Reserve is even less likely to act rashly. The global economic recovery is slow, and geopolitical risks pop up from time to time; even a slight deviation in policy could lead to chaos. In such times, the Fed will be more cautious, and rate cuts will naturally be pushed back.
Operational advice for friends in the crypto space:
Right now, don't expect the capital situation to loosen; in the short term, don't dive headfirst into long positions, maintaining a steady mindset is the most important.
Keep a close eye on the inflation data and employment reports for the second half of the year; these two are the 'hard signals' for rate cuts, so don't guess blindly before there's solid evidence.
Risk awareness cannot be neglected, money must be held tightly, don't be swayed by market emotions.
Pay more attention to the Federal Reserve's meeting minutes and officials' speeches; finding policy direction from the nuances is more reliable than listening to rumors.
Ultimately, the market's expectation of interest rate cuts is not supported by much substantial evidence, and the likelihood of a rate cut in September is mostly a mirage. Friends in the crypto space shouldn't be carried away by the excitement; stay grounded, focus on the real changes in data and policy to seize opportunities amid volatility.
I will continue to follow key economic data, and will analyze new developments as they arise. Everyone should pay attention so you don't miss critical market moments!