#FedRateWatch What's the Fed's Next Move?
90% of traders are expecting this hike... but the real question is is this just a one-off, or the start of a whole cycle? 👀
August core CPI came in at +0.3% month-over-month, still running above the Fed's 2% target, and futures markets are now pricing in close to a 90%+ chance of a 25bp hike at this week's meeting the first hike since 2023. My read: this looks less like a one-off and more like the Fed signaling it's not done fighting inflation. If the dot plot released alongside the decision shows more than one hike penciled in for the next few quarters, that's the tell it's the start of a cycle, not a single adjustment.
If the hike lands as expected, I'd expect a mixed reaction across assets. $BTC and risk assets could see a short-term dip as higher rates pressure liquidity and raise the opportunity cost of holding non-yielding assets though a "hike priced in" outcome sometimes triggers relief buying instead, especially if the tone on future hikes is cautious. Tech stocks are the most rate-sensitive of the bunch; higher discount rates compress valuations on long-duration growth names first. Gold is trickier a hawkish Fed with a stronger dollar tends to weigh on it short term, but if the hike is framed as inflation-fighting rather than growth-supportive, gold can hold up better than usual as a hedge.
My plan 1 : trimming tech exposure into the decision, keeping BTC core position unhedged, watching gold for a dip-buy if DXY spikes.
My plan 2 : staying on the sidelines for this one no active trades right now. Watching how BTC, tech and gold react post-decision before deciding my next move
Not financial advice just how I'm thinking about positioning into Wednesday's decision. Curious how others are playing it.
#FedRateWatch #BTC
90% of traders are expecting this hike... but the real question is is this just a one-off, or the start of a whole cycle? 👀
August core CPI came in at +0.3% month-over-month, still running above the Fed's 2% target, and futures markets are now pricing in close to a 90%+ chance of a 25bp hike at this week's meeting the first hike since 2023. My read: this looks less like a one-off and more like the Fed signaling it's not done fighting inflation. If the dot plot released alongside the decision shows more than one hike penciled in for the next few quarters, that's the tell it's the start of a cycle, not a single adjustment.
If the hike lands as expected, I'd expect a mixed reaction across assets. $BTC and risk assets could see a short-term dip as higher rates pressure liquidity and raise the opportunity cost of holding non-yielding assets though a "hike priced in" outcome sometimes triggers relief buying instead, especially if the tone on future hikes is cautious. Tech stocks are the most rate-sensitive of the bunch; higher discount rates compress valuations on long-duration growth names first. Gold is trickier a hawkish Fed with a stronger dollar tends to weigh on it short term, but if the hike is framed as inflation-fighting rather than growth-supportive, gold can hold up better than usual as a hedge.
My plan 1 : trimming tech exposure into the decision, keeping BTC core position unhedged, watching gold for a dip-buy if DXY spikes.
My plan 2 : staying on the sidelines for this one no active trades right now. Watching how BTC, tech and gold react post-decision before deciding my next move
Not financial advice just how I'm thinking about positioning into Wednesday's decision. Curious how others are playing it.
#FedRateWatch #BTC
