The interest rate cut is finally coming. Regarding the Fed's interest rate cut, the market has been warming up since the end of 2022. Next, it depends on whether the US stock market, gold, and Bitcoin will rise or fall.

Powell spoke at the FOMC meeting and released a signal of a September interest rate cut. According to data from the Chicago Mercantile Exchange, the market believes that the probability of a 25 basis point interest rate cut in September is 70%, and the probability of a 50 basis point cut is 30%. Did you see it? The market believes that the probability of a September interest rate cut is 100%~

So how will the market go after the interest rate cut? This actually depends on whether the Fed's interest rate cut is a preventive interest rate cut or a recession-type interest rate cut.

Since 2000, the Federal Reserve has experienced three rounds of interest rate cuts, corresponding to the 2003 Internet bubble, the 2008 subprime mortgage crisis, and the 2020 epidemic. Among them, the interest rate cuts in the 2003 Internet bubble and the 2008 subprime mortgage crisis were as high as 500 basis points, which were recession-type interest rate cuts. At that time, the US economy had already experienced a serious recession, and recession interest rate cuts usually have the characteristics of long cycles and large amplitudes.

Preventive rate cuts usually have a short rate cut cycle and a slightly smaller rate cut. For example, the overall rate cut for the 2020 epidemic was only 150 basis points. As can be seen from the picture below, in the preventive rate cut stage, US stocks, gold, and Bitcoin all performed well. In contrast, in the recessionary rate cut stage, US stocks performed poorly, and Bitcoin has not yet been born.

Judging from the current situation in the United States, it can be said that economic growth is under pressure and the overall macroeconomic environment is relatively stable. In addition, Powell's overall style of behavior is similar to Greenspan's data dependence, so the rate cut rhythm is likely to adopt Greenspan's style of walking and watching in 1995.

I don't like to judge. The Fed's rate cut this time is likely to be a preventive rate cut. Judging from the recent surge in gold, it is obvious that the market also understands the September rate cut as a preventive rate cut.

Let's talk about it. After the Fed's September rate cut, can Bitcoin be tough?