Let's talk about next week's Federal Reserve meeting and what the market is concerned about.
To put it simply, a 25 basis point rate cut in December is now almost a consensus expectation in the market. But the trouble lies not in this meeting, but in next year: how much to cut and why to cut, these two opposing voices are arguing fiercely.
The market is pulling between two scenarios:
· Dovish scenario (worried about employment): believes that the Federal Reserve is more afraid of a sudden spike in the unemployment rate (especially since AI may have already begun to impact college graduate employment), so it would cut rates to “support” even if inflation is temporarily high. This is potentially positive for market liquidity.
· Hawkish scenario (worried about inflation): believes the economy is still strong, and inflation is stubborn, so the room for rate cuts is actually limited. Some officials have clearly opposed, arguing that rate cuts won't solve the employment issues brought about by “technology and demographic structure.”
The impact path on the cryptocurrency market:
1. Short term (next week): the focus is not on “whether to cut rates,” but on Powell's remarks after the meeting. If he hints at “we are almost there,” the market may feel disappointed; if he emphasizes “watch the data, especially employment,” the dovish narrative will prevail, which is positive for sentiment.
2. Medium term (next year): the real contest lies in the data. Every employment and inflation data release will cause these two forces to ebb and flow, and market volatility is inevitable. If the narrative of “worried about employment” is continuously validated, expectations for liquidity easing will be stronger.
In terms of operations, one can pay attention to:
· After next week's meeting, if the market falls due to “hawkish statements,” don’t rush to panic sell; clarify whether it’s short-term sentiment or a trend change.
· In the first half of next year, the details of employment data (especially for highly educated individuals) may influence the Federal Reserve's real thoughts more than inflation data.
· During this period of expectation confusion, being flexible in positions is more important than directional judgment.
In summary, what the market is buying now is not “rate cuts,” but “what the Federal Reserve is worried about.” Concern about employment is not necessarily a bad thing for us.
(Source: Financial Times of the UK and analysis from several institutions, for reference only)
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