#FedRateWatch
This Wednesday at 2pm ET, the Fed does something it hasn't done since 2023: it might actually raise rates instead of cut them. That's the story nobody was pricing in six months ago.
Here's where things stand. August core CPI came in hot at 0.3% month over month, and after Chair Warsh's hawkish tone at Jackson Hole, market odds for a 25bp hike are sitting close to 90%. My read: this looks less like the start of a full hiking cycle and more like a one off insurance move. The inflation pressure right now is coming from oil prices tied to the Iran conflict disrupting shipping routes, not an overheating economy chasing too much demand. That's a very different setup than 2022, when the Fed hiked into a genuinely overheated labor market.
If the hike lands as expected, here's how I'd expect it to ripple:
📉 Bitcoin: the more rate sensitive asset in this group. BTC already pulled back from August's highs and is sitting near $77K. A hike tightens the dollar and pressures risk assets, though ETF demand has been absorbing selling pressure better than people expected all year
📊 Tech stocks: higher borrowing costs hit growth names hardest, especially anything trading on future earnings rather than current cash flow. Expect more chop than a clean drop if it's already priced in
🥇 Gold: this is the one actually benefiting from this specific setup. Since the hike narrative is tied to a supply shock and geopolitical risk rather than a strong economy, gold has been the preferred hedge over Bitcoin this time around, and that pattern likely continues
The bigger variable honestly isn't hike versus hold, it's whether the outcome surprises the market relative to where odds are sitting the morning of. A hike that's already 90% priced in probably moves markets less than people expect.
Where are you positioned heading into Wednesday, leaning defensive, or buying any dip that shows up? Drop your take below and share your setup with the trade widget 👇
NFA. This is a genuinely uncertain macro moment, size accordingly and do your own research.
#BTC #fomc
This Wednesday at 2pm ET, the Fed does something it hasn't done since 2023: it might actually raise rates instead of cut them. That's the story nobody was pricing in six months ago.
Here's where things stand. August core CPI came in hot at 0.3% month over month, and after Chair Warsh's hawkish tone at Jackson Hole, market odds for a 25bp hike are sitting close to 90%. My read: this looks less like the start of a full hiking cycle and more like a one off insurance move. The inflation pressure right now is coming from oil prices tied to the Iran conflict disrupting shipping routes, not an overheating economy chasing too much demand. That's a very different setup than 2022, when the Fed hiked into a genuinely overheated labor market.
If the hike lands as expected, here's how I'd expect it to ripple:
📉 Bitcoin: the more rate sensitive asset in this group. BTC already pulled back from August's highs and is sitting near $77K. A hike tightens the dollar and pressures risk assets, though ETF demand has been absorbing selling pressure better than people expected all year
📊 Tech stocks: higher borrowing costs hit growth names hardest, especially anything trading on future earnings rather than current cash flow. Expect more chop than a clean drop if it's already priced in
🥇 Gold: this is the one actually benefiting from this specific setup. Since the hike narrative is tied to a supply shock and geopolitical risk rather than a strong economy, gold has been the preferred hedge over Bitcoin this time around, and that pattern likely continues
The bigger variable honestly isn't hike versus hold, it's whether the outcome surprises the market relative to where odds are sitting the morning of. A hike that's already 90% priced in probably moves markets less than people expect.
Where are you positioned heading into Wednesday, leaning defensive, or buying any dip that shows up? Drop your take below and share your setup with the trade widget 👇
NFA. This is a genuinely uncertain macro moment, size accordingly and do your own research.
#BTC #fomc