It seems a rate hike is really coming after all
The market broke below 76K early—once the rate hike is implemented, will it still keep falling?
$BTC
The market broke below 76K early—once the rate hike is implemented, will it still keep falling?
$BTC
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灯塔说
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A new week begins, and this week’s key focus is the interest rate decision meeting.
At present, most major institutions have concluded that this meeting will result in a rate hike, and the market is also trading according to these expectations. The current conditions show that the probability of a rate hike is steadily rising, but there are also many conditions that would prevent a hike.
Now the pressure is on the Fed. I previously expected the Fed to withstand the pressure, but this time both the oil price and the two forward-looking data releases lean toward a rate-hike expectation, so I’m starting to wonder whether the Fed might actually raise rates this time.
However, there are several scenarios for a rate hike, and both the announcement of the rate-hike decision and the remarks during the subsequent press conference will have a major impact.
If the Fed truly raises rates by 25 basis points in September, but downplays the possibility of continued hikes afterward, then the downside move that has been priced in early may be limited, and the room for a further pullback would be narrow.
If, after raising rates by 25 basis points, the Fed further reinforces expectations of ongoing tightening, then the market could face persistent downward pressure.
On the contrary, if the Fed withstands the pressure and keeps the interest rate unchanged, the market may rebound. But if, at the press conference, the tone is hawkish and it emphasizes that subsequent hikes could be delayed, that would also affect the market. Still, I think this probability is too low. If they don’t hike in September, then they certainly won’t in October either (even though oil prices surged in September).
So, based on the above and in combination with the market outlook, the probability of a bottoming-and-rebound versus sustained decline is 6:4. I’m more inclined to look for opportunities around the lows for a range/bottoming play. I believe the Fed should maintain its stance—hawkish in words but unchanged in action.
$BTC
At present, most major institutions have concluded that this meeting will result in a rate hike, and the market is also trading according to these expectations. The current conditions show that the probability of a rate hike is steadily rising, but there are also many conditions that would prevent a hike.
Now the pressure is on the Fed. I previously expected the Fed to withstand the pressure, but this time both the oil price and the two forward-looking data releases lean toward a rate-hike expectation, so I’m starting to wonder whether the Fed might actually raise rates this time.
However, there are several scenarios for a rate hike, and both the announcement of the rate-hike decision and the remarks during the subsequent press conference will have a major impact.
If the Fed truly raises rates by 25 basis points in September, but downplays the possibility of continued hikes afterward, then the downside move that has been priced in early may be limited, and the room for a further pullback would be narrow.
If, after raising rates by 25 basis points, the Fed further reinforces expectations of ongoing tightening, then the market could face persistent downward pressure.
On the contrary, if the Fed withstands the pressure and keeps the interest rate unchanged, the market may rebound. But if, at the press conference, the tone is hawkish and it emphasizes that subsequent hikes could be delayed, that would also affect the market. Still, I think this probability is too low. If they don’t hike in September, then they certainly won’t in October either (even though oil prices surged in September).
So, based on the above and in combination with the market outlook, the probability of a bottoming-and-rebound versus sustained decline is 6:4. I’m more inclined to look for opportunities around the lows for a range/bottoming play. I believe the Fed should maintain its stance—hawkish in words but unchanged in action.
$BTC