When the Fed sneezes, the global market catches a cold. Where will this sneeze land tonight?
The latest report from CITIC Securities has shattered the illusion: global funds are like ants on a hot pan, just waiting for Fed Chairman Powell to say something at the central bank annual meeting. The July CPI data has just given the market a taste of the sweetness of interest rate cuts, only for the PPI data to pour cold water on it. Now everyone is betting—will old Powell tonight sound 'dovish' or 'hawkish'?
Interest rate cut expectations have become a seesaw.
The erratic performance of US stocks these days resembles elementary school students waiting for their teacher to announce test scores. When the CPI data was released, the market was dreaming of a September interest rate cut, only for the PPI data to counter with the 'stickiness of inflation theory'. Now Wall Street is divided into two factions: one believes the Fed will be slapped in the face by the data and continue to hold firm, while the other bets the central bank cannot withstand the pressure and will loosen up early.
The crypto circle has already struck a pose.
Bitcoin has been pretending to sleep around $110,000 these days, while ETH is huddled at $4,400 like a good child, clearly waiting for the macro winds. It's worth noting that last year Powell's 'hawkish strike' at the central bank annual meeting directly caused the market to plummet 8% in a single day. If he suddenly changes his tune this year and says 'inflation is controllable', all trading software will likely be overwhelmed with buy orders.
The script for the three categories of assets has been written.
Interest rate-sensitive players have long been itching to make a move: the holdings of gold ETFs have secretly hit new highs, options betting on US tech stocks have surged, and even the perpetual contract funding rates in the crypto circle have started to turn positive. The market consensus is clear—once Powell hints at an interest rate cut, Bitcoin will rush to new highs, altcoins will catch up, and meme coins will have a party.
Survival rules for seasoned investors.
Those who experienced the interest rate hike storm of 2022 understand: the Fed's words are deceiving. The safest strategy now is to wait for the boot to drop—if Powell continues to play tai chi, keep an eye on the Bitcoin $60,000 support line; if unexpectedly dovish, don’t hesitate to jump into ETH and SOL, these high-beta targets. Remember, 'the words of a central bank governor are worth gold, but your stop-loss order is worth your life.' For precise daily analysis and market news, please check my profile.
