The first rate cut since March 2020 (previous bull run).
The forecast and expectations of the market today are:
- 0.25% rate cut = bullish
- 0.5% rate cut = bullish
- No rate cut = bearish
The good news? No rate cut is basically already off the table.
It's been confirmed a rate cut will happen. The question that remains is whether it will be 0.25% or 0.50%.
At the same time this has also been confirmed to just be the start of a series of rate cuts that will extend into 2025 (rate cut cycle).
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I believe the move of the announcement has already largely priced in.
We know there's a rate cut coming and the market already made a bullish move yesterday to front-run it.
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The potential bad news? (we got to look at each side of the coin)
Rate cuts are both a blessing and a curse.
Of they achieve what they intend to do? It's bullish.
They lower borrowing costs for mortgages, auto loans and credit cards, as well as for business loans.
It is also intended to sustain healthy economic growth.
Spending becomes easier and this leads to a positive effect to the financial markets.
But rate cuts are also the cure to something that needs to be solved (a looming recession).
If it is to late and we don't achieve a soft-landing things could break and get worse.
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My opinion?
If things "break" we will likely see the effects of that in only 6 months to 1 year.
Other than that I expect the markets to overall react positively to the rate cuts for the next few months.
So either we have bullish price action which will sustain itself for a longer amount of time.
Or we will have bullish price action but lasting shorter than anticipated and we will have to adjust take profits or risk-off earlier when rate cuts aren't helping.
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Either way I see Q4 and potentially Q1 2025 healthy and safe to navigate and take opportunities (bullish).
What happens after is something we need to monitor.$BTC