Breaking news! The Fed is asked to cut interest rates by 75bp. Is this going to explode?

The recent trend of US stocks is interesting. The Nasdaq has been mixed, basically hovering on the flat market, but there is a key reason behind it: US stocks are being protected. Especially if you look at those big banks, they rise and fall every day. It is obvious that someone is supporting them to prevent them from looking too bad.

Why is the market being protected? This has to start with the Fed's expectations for interest rate cuts. Recently, the market has seen a big change in the magnitude of the Fed's first interest rate cut. Just last Monday, everyone thought that the probability of a 50 basis point rate cut was only 15%, but by Friday, the probability had jumped to 50%. And at the close of yesterday, it soared to 67%. In other words, the call for a 50 basis point rate cut is already very strong.

Interestingly, some people are even urging the Fed to cut interest rates by 75 basis points in advance, saying that it is to relieve pressure on the labor market. To put it bluntly, the 75 basis point call is actually to force the Fed to cut at least 50 basis points. 25 is not enough. After all this trouble, the people on Wall Street will probably yell a few times.

Why are people so eager to force the Fed now? The reason is simple - the banks can't hold on any longer! Big banks like Bank of America bought a lot of high-priced government bonds during the low interest rate period. Now that the interest rate hike cycle has come, they are suffering from serious book losses. So these financial giants are now crying for interest rate cuts, the sooner the better, otherwise they will really "die for you to see".

After all this trouble, the current situation is very delicate. If the Fed still only cuts interest rates by 25 basis points in September, the market will feel that it is not good enough, and there may be a wave of selling in the US stock market, especially bank stocks. If it is reduced by 50 basis points, it is in line with expectations, but the cost is that it may trigger secondary inflation, and the US stock market may fluctuate slightly, especially technology stocks may lead the decline. If the interest rate is really reduced by 75 basis points, it proves that the US economy has begun to go downhill, and there is a high possibility of a sharp drop in the US stock market. Of course, this situation is still relatively difficult to occur.

In short, the pressure on the US stock market has not been completely released, and the Fed's interest rate cut is still hanging in the balance. Various voices in the market are coming one after another. Everyone has to keep a close eye on this interest rate cut drama. $BTC #美联储利率决议公布在即 #加密市场反弹