At 2:00 a.m. on September 17 (Beijing time), the Federal Reserve will release its September rate decision; at 2:30, the Fed chair will hold a press conference.
The market has already priced in the “25-basis-point rate hike” quite fully. Reuters, citing market data, says the probability of a 25-basis-point hike is already around 90%; another Reuters survey shows that 85% of economists expect this 25-basis-point rate hike.
So, what’s truly worth watching tonight may not necessarily be just “whether to hike or not.”
More importantly: after the rate hike, what signal does the Federal Reserve send about the future path of interest rates?
If a 25-basis-point rate hike matches expectations, the market may see a “bad news priced in” type of move. If the wording is clearly hawkish, it means the likelihood of further tightening rises; the dollar and U.S. Treasury yields could be further supported, putting pressure on gold, and also weighing on risk assets.
On the other hand, if there is a rate hike but the remarks are clearly dovish, the market may trade again the logic that the rate-hiking cycle is nearing its end. The dollar and yields could weaken, while gold and risk assets—including BTC—may receive support.
That’s why, after the data is released at 2:00 tonight, you may not be able to judge the final direction right away.
2:00: Watch the rate decision;
2:00—2:30: Watch the first wave of market reaction;
Starting at 2:30, focus on the chairman’s remarks;
Then watch whether there is any resonance among the dollar, U.S. Treasury yields, gold, and BTC.
At present, the U.S. 10-year Treasury yield has already broken above 5% at one point, and the dollar is also in a relatively strong position recently. The market’s sensitivity to this meeting has increased noticeably.
Gold today is also waiting for this outcome. Reuters reports that spot gold rose at one point during the day. The market has already priced in a rate hike expectation of 25 basis points to a large extent. Analysts believe that a hawkish policy signal could weigh on gold, while a dovish signal could give gold a rebound tailwind.
So the one line worth remembering tonight is:
“Markets are not trading the rate hike itself, but the difference between the rate hike result and the prior expectations.”
For BTC, it’s the same.
Tonight there may be risks, and there may also be opportunities. But during the 2:00—2:30 window, when liquidity rapidly reprices, the thing you most need to guard against is the direction “signaled by the first candlestick.”
First look at the data, then the remarks, then the dollar and U.S. Treasury yields. Finally, watch whether BTC and gold confirm the direction.
Tonight, are you more focused on BTC or London gold?
