May 2, 2024 Grandpa checks in
The interest rate meeting ended last night, and the Federal Reserve maintained the benchmark interest rate at 5.25%-5.5% for the sixth consecutive time, which was in line with market expectations. However, the market's focus is mainly on when to start cutting interest rates. JPMorgan Chase and Goldman Sachs estimate the time to be July, Wells Fargo bets on September, and Bank of America is the latest, believing that the first rate cut will be in December. In this way, interest rate cuts will basically not start until the second half of the year, and if the economy is stable, the intensity of the rate cut will not be too large.
At present, investors are indifferent to the benefits brought by the interest rate cut in the expectation management. The best proof is that after the US stock market rebounded to the previous high, it was blocked and fell back. According to the previous market rules, the market will continue to rise before the interest rate cut to welcome the implementation of this benefit. From a macro perspective, if the US stock market does not break the new high this time, the market will be relatively flat before the interest rate cut. Another point of concern is that the Federal Reserve is obviously seeing that the data level is relatively good, so it dares to maintain high interest rates unscrupulously, but it is unknown whether there are potential risks, which is what we often call black swans.
As for the market, it is definitely affected by the macro-economic situation. So far, the price of Bitcoin and the US stock market have maintained a close linkage, but other currencies have relatively independent market conditions. On the one hand, the price of the cottage industry has generally fallen by half from its high point, and on the other hand, many have shown signs of support, so it is not a big problem for us to intervene and hold some at this position. As for whether there will be a black swan that triggers a linked decline, this is unpredictable, and we can only avoid it through reasonable position control.
Objectively speaking, Bitcoin falling below 60,000 is definitely a risk factor, but as long as we restrain ourselves from buying at different support levels, we can cope with the potential decline. It is worth noting that after the halving, Bitcoin's price has reached the shutdown price of many mining machines, and the corresponding selling pressure will be appropriately reduced. Therefore, from the perspective of market risk, Bitcoin has an extra layer of protection. However, the recent market will still fluctuate and move down slightly, but there is no need for us to sell, just look for opportunities to buy.
Thank you for your attention and likes.
