As the Fed meeting approaches, the clouds of inflation seem to have cracks, and a ray of light shines through. At this delicate moment, Bitcoin is like a wild horse that has broken through the $69,000 mark in one fell swoop. The driving force behind it is the expectation of the upcoming interest rate cut, which seems to have injected a shot of adrenaline into the cryptocurrency market, indicating that investors' borrowing costs will be reduced and the price of crypto assets will rise.
The U.S. Department of Commerce wrote leisurely in its report on Friday: Consumer spending last month was like a leisurely walker, with a slightly slower pace. The easing of price pressures and the slight cooling of the labor market seem to have brought a cool drink to Fed officials, strengthening their confidence that inflation is steadily moving towards the central bank's 2% target. To learn more about the logic of cryptocurrency investment, please visit my homepage! 🌟
Data show that the personal consumption expenditure price index, the Fed's favorite measure of inflation, rose only 0.1% last month, and it was even unchanged in May. Compared with a year ago, this index is like a slowly climbing snail, rising only 2.5%.
Interest rate cuts seem to have the mysterious power to boost crypto asset prices. Because with lower rates, lending becomes more tempting and accessible to investors, like a cold drink on a summer day.
Wall Street analysts, like a group of magicians who can predict the future, wave their crystal balls and predict that the price of Bitcoin will soar like a rocket to $100,000 this year. At this moment, the trading price of this digital gold is firmly above $69,200.
However, the next policy meeting of the Federal Reserve is like a big drama that is about to be staged, scheduled to kick off on July 30-31. The FedWatch tool of the Chicago Mercantile Exchange, like a shrewd fortune teller, takes into account the federal funds data provided by derivatives traders and then leisurely spits out its prediction: the probability of no rate cut this month is as high as 95.5%.
But in September, a month as ripe as autumn fruits, the probability of a 25 basis point rate cut is as hot as the summer sun, exceeding 85%. A further 14% of people are like greedy children, predicting that the interest rate cut will be even greater.
