The market expects that next year the Federal Reserve will not cut interest rates and may even raise them. The dot plot for next year is expected to drop from four cuts to two. Will the U.S. stock market and Bitcoin assets enter a new round of decline? Let's not guess blindly. On the contrary, I believe the Federal Reserve is likely to be inconsistent in its words and actions. Don't just look at what they say; pay attention to what they do.
This time, the Federal Reserve met market expectations by cutting rates by 25 basis points. Moreover, regarding the economic forecast for next year, the Federal Reserve is quite confident, raising the U.S. GDP growth rate for 2024 from 2.0% to 2.5%, and only slightly increasing next year's inflation from 2.4% to 2.5%. This means that the U.S. is still a top student. So why does the dot plot appear so hawkish? Why did the previous market prediction of four rate cuts get halved to two? This reflects that the Federal Reserve is currently addressing the two major risks of the future market.
The first major risk is the upcoming administration, which may bring strong economic stimulus and global tariff increases, potentially causing a second rebound in U.S. inflation. Therefore, the current strong hawkish stance is a policy hedge aimed at cooling the market in advance and reducing inflation expectations, so that next year there won't be concerns about the impacts of policies.
In addition to the risks of hedging policies, there is a second risk in the market, which is the risk of prices rising. Now, the U.S. stock market has risen to its highest valuation in nearly a decade, especially the Dow Jones Index and Bitcoin, which has recently broken new highs! Moreover, the U.S. stock market is highly concentrated in technology stocks represented by seven major companies, and Bitcoin ETFs, all of which have set historical highs. Major indices indicate that the market has risen to an unsustainable level. Therefore, to allow the U.S. stock market and Bitcoin to rise better, it is necessary to actively create a bubble. This time, the Federal Reserve's expectation management is aimed at quickly cooling down the fervent market.
Now, everyone is predicting that the market has dropped to freezing point. For example, bond traders are currently predicting only one rate cut next year.
If you only predict one rate cut next year, what if I cut rates twice? Wouldn’t that exceed your expectations? What if I cut rates three times tomorrow? Would you be grateful? What if I cut rates four times tomorrow? Wouldn't the market just take off? In controlling this initiative, if there are any signs of disturbance in the U.S. economy next year, the Federal Reserve can cut rates unexpectedly, leading to surprisingly good outcomes. This rate-cutting meeting feels more like a performance deliberately arranged by the Federal Reserve.
During Powell's entire speech, did anyone notice that he pointed out one thing? He stated that this dot plot does not represent the future path of interest rate cuts. The members of the Federal Reserve will not base the actual rate-cutting path on this dot plot; it's essentially a label telling you that this dot plot is meant for the market.
So next, the assets that are oversold in the global financial market, as well as cash flow and fundamentals, remain strong. As for the fact that the Federal Reserve doesn't buy Bitcoin, there's no need to worry about that. Just because the Federal Reserve doesn't buy doesn't mean Trump and the U.S. government, U.S. institutions, and publicly traded companies won't buy. If you don't want to buy, does that mean others can't make money? It's simple, right? They say they don't want it, but their actions tell a different story.
Based on no substantial changes in fundamentals, a single speech by Powell cannot change the current upward trend; instead, it has created a golden opportunity for entering the market. Therefore, I still stick to the strategy of buying during significant drops. Good targets like ETH, SOL, and PEPE can be gradually accumulated. I believe that by the first quarter of next year, when the understood king takes office, everyone's assets can at least double. Let's set a short-term small goal! Everyone, feel free to buy, buy, buy!
$ETH $SOL $PEPE #币安Alpha项目公布 #美联储放鹰 #加密市场回调 #市场调整後的机会？ #USUAL现货上线币安
