Market expectations for a rate cut in September soared at one point, with probabilities reaching 94%. However, with the recent short-term corrections in the U.S. stock and cryptocurrency markets, some striking phenomena have gradually emerged.
During the market adjustment, several Federal Reserve officials have spoken one after another, suggesting that a rate cut will not come soon. Originally, the market generally expected three rate cuts this year, but these officials have hinted that there may only be one. Such 'negative news' compounded during the correction has clearly undermined retail investor confidence, and more and more people are beginning to believe that 'Bitcoin peaked at $120,000' and 'Ethereum at $4,800 is already the high point of this cycle'.
We must first understand the role of the Federal Reserve: it is essentially an institution that serves Wall Street and large capital, standing behind which are the main funds of the financial market. Do you think the main players will honestly reveal their true intentions to retail investors?
If you plan to pump up the market, would you notify the other party in advance, saying 'I'm going to pump now, hurry up and get on board'? Of course, you wouldn't. Looking back at the rate cut process since last September, the Federal Reserve has only cut rates three times, and each time the reduction was only 25 basis points. We must consider: what is the purpose of a rate cut? Will it stop after just a small cut? The answer is clearly no.
A rate cut is like the changing of the seasons, it has its cyclical rules—after spring comes summer and autumn, it will not revert to winter due to one cooling. Once a rate cut begins, it must achieve its economic objectives. From various data metrics such as non-farm payrolls and CPI, it is evident that the desired effects have not yet been achieved, which already meets the conditions for further rate cuts.
Therefore, regardless of how the market's short-term sentiment fluctuates, and regardless of how Federal Reserve officials manage expectations, I believe that a rate cut on September 18 remains a high-probability event. The operation of the financial market is never simple; believing everything you hear is the most dangerous tendency—if you trust what others say, you will ultimately be the one to suffer.
The main players will always try their best to lure you into counter-trend operations. For example, a few months ago, they used public opinion to suppress the market's general bearish view on Ethereum, but their true intention was to prepare for a pump. If you cannot identify these signals, you will miss the market, make wrong directional trades, or even operate in the opposite direction of the main players.
