The Fed will cut interest rates in December? The probability is over 60%! Can market sentiment be restrained?
On November 17, CME's "Fed Watch" data showed that the probability of the Fed cutting interest rates by 25 basis points in December has risen to 61.9%, while the probability of maintaining the current interest rate unchanged is 38.1%. This dynamic directly ignited the market's expectations for loose policies.
What does the expectation of interest rate cuts reveal?
The signal of economic slowdown is obvious: the rising expectation of interest rate cuts indicates that the Fed may pay more attention to the risk of slowing economic growth and be cautious about the sustainability of high interest rate policies. Market funds may be reallocated: interest rate cuts mean that market liquidity may be further released, and stocks, bonds and even cryptocurrency markets may usher in a wave of capital inflows. The US dollar is under pressure, and risky assets are turning around: if the interest rate cut is realized, the US dollar may weaken, which is a potential positive for anti-inflation assets such as gold and BTC.
How should investors respond?
Every move of the Fed will profoundly affect the market trend. At present, investors need to pay close attention to economic data in November and December, especially inflation and employment reports. At the same time, early deployment of risky assets may become a consensus among big funds.
Interest rate dynamics can help you seize the opportunity! Follow Lao Chen and decipher the trend code together!
