The US dollar rate cut is about to land, will it really rise? A detailed discussion of historical logic
We compare the historical trends of US stocks after the start of three rate cut cycles in the United States in the past 20 years to clarify the logic
The last round of Fed rate cuts occurred in July 2019.
This was an extremely rapid rate cut caused by the COVID-19 pandemic. Before the Fed cut interest rates in July 2019, US stocks were rising amid doubts about the trade war and the global economic slowdown. By February 2020, due to the spread of the epidemic, the US stock market fell vertically by nearly 90 degrees, and experienced multiple circuit breakers in the middle.
In summary: The time node of the last rate cut cycle and the subsequent trend of the US stock market, the recession currency circle has the risk of a big drop.
The second focus is: the current trend does not look like a recession now
, the recession has not really arrived, the unemployment rate, non-agricultural, etc. are still within the controllable range, and there is no substantial evidence of recession on the surface. Judging from Powell’s speech, the Fed is also guiding the market to think so.
The third focus is the US election and Trump’s coming to power.
Summary: In the fourth quarter, the expectation of money easing is constantly increasing. The recession has not come yet. Don't worry about a big drop. Finally, there is the Trump narrative. In the medium and long term, as the expectation of the Fed's interest rate cut increases and the possibility of a weaker dollar increases, the appeal of Bitcoin as a hedge and hedging tool still exists.
