After Powell's dovish remarks, the expectation of a rate cut in September continues to cool
Although Federal Reserve Chairman Powell hinted at a possible rate cut at last Friday's Jackson Hole annual meeting, which briefly sparked optimism in the cryptocurrency market, recent market expectations for a September rate cut have significantly decreased.
According to CME Group's "FedWatch" tool, the market's probability of a rate cut in September has dropped from 92% at the beginning of August to 75% in recent weeks, while the probability of maintaining interest rates has risen from 7.8% to 25%. This change reflects ongoing market concerns about inflation and economic data.
Despite the decline in rate cut expectations, market sentiment has not completely turned pessimistic. According to Santiment data, discussions on social media regarding keywords such as "Federal Reserve," "interest rates," and "rate cuts" remain at historically high levels, indicating that investors still hold some expectations for a shift in monetary policy.
However, this heightened sentiment also carries risks. Historical experience shows that when the market is excessively optimistic, asset prices often approach a temporary peak. Another warning sign is the influx of nearly 70,000 BTC back to exchanges since early June, which typically indicates that investors may be preparing to sell holdings to take profits, further increasing the likelihood of a short-term market correction.
Currently, the market is in a wait-and-see state, awaiting clearer policy signals from the September Federal Open Market Committee (FOMC) meeting. While the expectation of a rate cut remains mainstream, the downward trend in probabilities suggests that investor attitudes are becoming more cautious.
In conclusion, amid rising uncertainties, it is advisable for investors to remain vigilant, avoid excessive reliance on a single macro event for investment decisions, and closely monitor economic indicators such as inflation data and employment reports that may influence the direction of Federal Reserve policy.
Remember, the market is always changing; only by calmly observing and steadily positioning can one navigate through cyclical fluctuations.
What are your thoughts on the changes in the probability of a Federal Reserve rate cut in September? Do you think BTC will experience significant volatility due to macro policy expectations in the near future? Leave your views and trading strategies in the comments!
