The crypto market has fluctuated and pulled back again. Can the currency circle really be saved after the interest rate cut?
Although Powell always releases data that the US economy is good and there is no need to rush to cut interest rates, the essence is that the US dollar tide does not meet expectations and does not want to cut interest rates so early.
However, many of these are smokescreens. The interest rate cut will only be a matter of one or two months. The current US debt is too heavy. Although the US does not repay the principal, the interest still needs to be paid.
Another point that needs to be explained is that after the interest rate cut, funds will generally be hedged first and converted into US dollars. The law of the stock market is more obvious, because the interest rate cuts in history have punctured too many bubbles and caused too many stock market crashes, such as puncturing the Internet bubble, puncturing the real estate bubble, and the recent stock market circuit breaker during the epidemic.
The first is to see whether the expectation of interest rate cuts is strengthened or weakened. For example, after the CPI data came out the day before yesterday, the expectation of interest rate cuts fell from 100% to more than 70%, so it fell.
If the 9.19 interest rate data is released and only 25BP is given, it may be that the good news has turned into bad news. If you want a big rise, you have to cut interest rates by 50BP in September or cut interest rates three times this year. In short, various overt and covert means are used to strengthen the expectation of interest rate cuts.
The second is to see whether the recession overdue is strengthened or weakened. Like yesterday's data, although it is not particularly good, it weakened the recession period, so it rebounded a little.
The bottom-level fundamental logic of the above two reference standards is nothing more than looking at the good or bad of the economy and the good or bad of liquidity. After all, liquidity is the real king. Of course, this is the methodology after extreme simplification. The specifics still need to be combined with the macro, meso and micro market conditions.
