#BTC #ETH #SOL
The probability of a rate hike has surged to 86.9%, reaching this level for the first time.
But look at the data itself: the core CPI month-on-month is 0.3%, only 0.1 percentage point higher than expected.
Yet the market reaction is as if inflation is out of control.
Even Goldman Sachs admits that they changed their stance on a rate hike not because their inflation outlook has changed, but because they fear that if the Fed doesn’t act, credit will be harmed.
Expectations were priced in too aggressively; after the data comes out, it’s easy for the move to turn into a selloff once the “good news” is no longer a surprise—i.e., a bearish “sell the news” outcome.
The real risk isn’t the rate hike itself, but the market’s reaction once a rate hike is treated as a foregone conclusion.
If they do hike, this could be the final drop.
If they don’t, then things will get even more interesting.
The probability of a rate hike has surged to 86.9%, reaching this level for the first time.
But look at the data itself: the core CPI month-on-month is 0.3%, only 0.1 percentage point higher than expected.
Yet the market reaction is as if inflation is out of control.
Even Goldman Sachs admits that they changed their stance on a rate hike not because their inflation outlook has changed, but because they fear that if the Fed doesn’t act, credit will be harmed.
Expectations were priced in too aggressively; after the data comes out, it’s easy for the move to turn into a selloff once the “good news” is no longer a surprise—i.e., a bearish “sell the news” outcome.
The real risk isn’t the rate hike itself, but the market’s reaction once a rate hike is treated as a foregone conclusion.
If they do hike, this could be the final drop.
If they don’t, then things will get even more interesting.
