Dear friends, the results of the Federal Reserve’s 2024 interest rate meeting are out, let’s take a look!
First of all, the meeting cut interest rates by 25 basis points, which is similar to market expectations, so there is nothing much to say. But the dot plot is interesting. I thought it would be hawkish before, but I didn’t expect it to be so direct - the expected interest rate cuts in 2025 were directly cut from 3-4 times to 2 times, which is a ruthless operation!
Let's talk about Powell's speech. He repeated the same old tune: inflation, employment, and a strong economy. We are all tired of hearing these. But there was a bright spot. Someone actually asked Powell about the US strategic reserve of BTC. Powell directly denied it. This is not difficult to understand. Standing in that position, how could he publicly support cryptocurrency?
I also noticed a conspiracy theory point. The Federal Reserve has been emphasizing the strength of the US economy. Is this to set a trap for Trump? If Trump cannot meet this high expectation, then the public's support for him will be in danger. In the mid-term elections two years later, the Democratic Party may be able to take advantage of the opportunity to turn the tables! Of course, this is just my guess.
Japan will not raise interest rates either, which we have discussed before. And I would also make a bold prediction that Japan may not raise interest rates at the January interest rate meeting, after all, it is only three days before Trump takes office, and Japan has to wait and see what the new boss says.
The market reacted, with the four major U.S. stock indexes falling collectively, with the Russell 2000, which had the largest drop, falling by 4.39%. But don't worry, I think the U.S. stock market will rebound soon after a short-term decline.
Gold and crude oil performed mediocrely, with gold still around $2,600, but the U.S. dollar index broke through 108, the highest point since November 2022. The 10-year U.S. Treasury yield also soared to 4.5% in the short term. All of this is due to policy adjustments and economic expectations.
BTC also fell, but it rebounded quickly and is now firmly above 100,000. I said that the price could not effectively fall below the daily middle track of 100,000. It was just a correction of the daily upper track, a short-term optimistic correction stage. Some friends think that the fall is too severe. I tell you, this is nothing. As the price of BTC rises, the price fluctuation will inevitably be greater. If you can't bear this fluctuation, then don't play the bull market.
To sum up, the action in the early morning was similar to my previous expectations. The overall price fell. Although the hawkish news has an impact on the pace of interest rate cuts next year, and Powell also denied the strategic reserve issue of BTC, these are short-term effects. Once Trump takes office safely, all expectations and plans will be readjusted. So don't be pessimistic. The short-term decline is only temporary and the market will digest it quickly. Let's take a look at the rebound of the US stock market tonight and the performance of altcoins over the weekend!
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