The deduction of the Fed's interest rate cut:

1. Time nodes

There are two important time points for the expectation of interest rate cuts: the Fed interest rate meetings on September 18 and November 7.

The US election time is the voting day on November 5. Unofficial results will be released that night or the next day, and official results will be released at the end of the year.

2. Interest rate cut data

According to CME data on the day, on September 18, 30.6% of the people did not cut interest rates, 57.2% of the people cut interest rates by 2.5 basis points, and 12% of the people cut interest rates by 5 basis points. The overall probability of expected interest rate cuts is 69.4%.

On November 7, the probability of no interest rate cuts is 17.8%, 46.5% of the people cut interest rates by 2.5 basis points, 30.6% of the people cut interest rates by 5 basis points, and 5% of the people cut interest rates by 7.5 basis points. The overall probability of expected interest rate cuts is 82.4%.

3. Rate cut deduction

Considering the situation of the US election, the election is 2 days before the rate cut in November. If the rate cut starts in November, the good news will be realized. The financial market will crash during the election, causing market fluctuations and affecting the election results.  

If the rate cut starts in September, there are still 2 months before the November election. Even if the US stock market crashes and pulls back, there is enough time to digest the short-term bubble and ensure the stability of the stock market during the election.  

4. Conclusion

To sum up the above, the probability of starting a rate cut in September is the highest.  

If this inference is true, then in the three months from June to August, there is a potential benefit of the expectation of a rate cut in the financial market, which is good for the US stock market and the crypto market.

Bitcoin is forming a trend of the main upward wave. After May, the crypto market will usher in a trend of continuous growth, but it will be slightly weaker in the third quarter.

The Bitcoin ecosystem is rising. The more Bitcoin rises, the greater the opportunity of the entire ecosystem will be, because institutions pull Bitcoin, and retail investors who cannot afford Bitcoin will consider the ecosystem, so it will further promote the related ecosystem.

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