Based on the latest market close data, the US Dollar Index rose nearly 2% cumulatively in September, marking its best single-month performance since March this year. In recent remarks, New York Fed Chair John Williams took a hawkish stance, saying that another rate hike before year-end may be appropriate. Coupled with strong US economic data and heightened geopolitical tensions that pushed up energy prices such as crude oil, these factors lifted the 30-year US Treasury yield to its highest level since 2002.
Despite the latest core PCE inflation data coming in below expectations—prompting the market to scale back its bets on an October rate hike—interest rate swap markets have fully priced in the December rate hike expectations and expect the Federal Reserve to tighten policy by roughly 90 basis points cumulatively over the next 12 months. The Fed reiterated its firm stance against inflation, directly driving the synchronized rise of the US dollar and US Treasury yields.
From a technical perspective, the US Dollar Index has already recorded a strong breakout. However, multiple momentum indicators (such as the daily RSI) have deeply moved into overbought territory, suggesting that short-term bullish sentiment may face a technical pullback and profit-taking. If US Treasury yields—after testing multi-year resistance levels—show signs of retreat, it would provide a much-needed breathing window for macro liquidity.
For the crypto market, weakening momentum in the dollar rally often serves as a leading indicator for risk-asset rebounds. With tightening expectations now fully priced in, core assets such as $BTC may see valuation repair and a technical rebound as liquidity is redistributed.📈
#DXY #Fed #MacroEconomics
Despite the latest core PCE inflation data coming in below expectations—prompting the market to scale back its bets on an October rate hike—interest rate swap markets have fully priced in the December rate hike expectations and expect the Federal Reserve to tighten policy by roughly 90 basis points cumulatively over the next 12 months. The Fed reiterated its firm stance against inflation, directly driving the synchronized rise of the US dollar and US Treasury yields.
From a technical perspective, the US Dollar Index has already recorded a strong breakout. However, multiple momentum indicators (such as the daily RSI) have deeply moved into overbought territory, suggesting that short-term bullish sentiment may face a technical pullback and profit-taking. If US Treasury yields—after testing multi-year resistance levels—show signs of retreat, it would provide a much-needed breathing window for macro liquidity.
For the crypto market, weakening momentum in the dollar rally often serves as a leading indicator for risk-asset rebounds. With tightening expectations now fully priced in, core assets such as $BTC may see valuation repair and a technical rebound as liquidity is redistributed.📈
#DXY #Fed #MacroEconomics