Inflation in the US is once again higher than forecast. Some authors are writing on Square: “The Fed won’t cut rates.” The problem is that the Fed is currently discussing not cuts, but hikes.
October CPI:
headline - +0.4% month over month, versus a forecast of 0.3%;
core - +0.3%, versus a forecast of 0.2%.
The reaction was immediate: more than $200 million in longs were liquidated within minutes. $BTC fell below $74k at the time of writing this post.
Why the context matters. In September, the Fed had already raised rates to 3.75–4%. On October 28, it left them unchanged, but two committee members voted for a hike. At the time, the market put the odds of a hike on December 9 at around 85%.
So today’s figures are not a “delayed rate cut.” They’re another argument for higher borrowing costs. And higher borrowing costs are the main enemy of risk assets, especially crypto.
Anyone who opened longs expecting a “dovish” Fed paid for it today. The next checkpoint is the December 9 meeting.
Do you believe the Fed will raise rates in December, or is the market overreacting?
October CPI:
headline - +0.4% month over month, versus a forecast of 0.3%;
core - +0.3%, versus a forecast of 0.2%.
The reaction was immediate: more than $200 million in longs were liquidated within minutes. $BTC fell below $74k at the time of writing this post.
Why the context matters. In September, the Fed had already raised rates to 3.75–4%. On October 28, it left them unchanged, but two committee members voted for a hike. At the time, the market put the odds of a hike on December 9 at around 85%.
So today’s figures are not a “delayed rate cut.” They’re another argument for higher borrowing costs. And higher borrowing costs are the main enemy of risk assets, especially crypto.
Anyone who opened longs expecting a “dovish” Fed paid for it today. The next checkpoint is the December 9 meeting.
Do you believe the Fed will raise rates in December, or is the market overreacting?
