The Fed has frozen the federal benchmark interest rate at 5.25% to 5.5% since July last year. Although Fed officials have repeatedly released hawkish remarks, claiming that there will be only one rate cut this year, the recent inflation data still boosts market confidence, believing that the Fed may start cutting interest rates in September and will cut interest rates twice this year.

Beth Ann Bovino, chief economist at U.S. Bank, said yesterday after the PCE data came out:

We do expect the real economy to weaken, but not fall off a cliff, just weaken, which means that inflation will also slow down in the future. This gives us reason to expect that the Fed may start cutting interest rates in September.

We all know it depends on the data and the Fed is still waiting. Are they still waiting? Will there be only one cut this year? I can't rule it out, but the data seems to make the case for the Fed to cut twice this year.

In addition, according to the CME Fed Watch tool, the market is also inclined to believe that the Fed will start cutting interest rates in September, with a probability of 59.5%, and the probability of maintaining interest rates unchanged in September is only 34.1%.


As for the interest rate in December, the market expects the Fed to have a 44% chance of cutting interest rates for the second time in December and a 30.4% chance of starting to cut interest rates in December. Almost no one believes that the Fed will maintain the current interest rate level in December.


This means that interest rates will be cut no matter what, and interest rate hikes have been stopped for more than a year. I can see that the time for interest rate cuts is getting closer and closer to us.


Therefore, no matter whether the current news is bad news or good news, it will not affect the eventual interest rate cut.


We must be clear about the essence. Raising and lowering interest rates are market rules and the nature of the financial market, and the data changes every month.


We can understand that interest rate hikes and cuts are like the bull and bear market trends, and the data news each month is just a short-term market fluctuation during the period and does not affect the trend.


So when we know that the high-level fluctuation of interest rates is about to end and that interest rates will be cut soon, the interest rate cut will be a big boon to the entire financial market, and we will know the future trend of the entire market.


Yesterday's correction and yesterday's negative news were just news deliberately released by the main force to influence retail investors.


Before the main force wants to pull up the market, it will definitely scare retail investors. Only when retail investors dare not enter the market, dare not hold on, and are afraid that the market will continue to fall sharply, will the main force be able to pull up the market easily.

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