The market is heating up! With August core CPI rising by 0.3% month-over-month, the data clearly shows persistent inflation sticky enough to push the Fed. Now, with the odds of a 25bp hike this week sitting close to 90%, a rate hike feels almost inevitable.
In my view, this won't be a one-off event. We are likely looking at the continuation of a longer, cautious hiking cycle as the Fed tries to fully tame macro pressures without causing a hard landing.
📈 How will the markets react? Here is my breakdown:
Bitcoin ( $BTC ): Short-term bearish, long-term bullish. A hike initially sucks liquidity out of risky assets, causing volatility. However, BTC’s long-term resilience as a decentralized hedge will attract capital once the dust settles.
Tech Stocks: Bearish. Higher rates mean higher borrowing costs, which directly squeezes growth margins for major tech giants. Expect a temporary correction.
Gold ( $XAU ): Bullish. Gold loves macro uncertainty. As fiat currencies face pressure from continuous rate adjustments, safe-haven inflows will push gold higher.
My Trading Strategy:
I am playing this smart. Instead of over-leveraging, I am building dollar-cost averaging (DCA) positions into BTC during the immediate post-FOMC dips. I am also hedging my portfolio by allocating a percentage to gold.
I’ll be sharing my exact holdings right below using the Square Trade Sharing Widget so you can track my moves in real-time!
What about you? Are you bullish or bearish for this FOMC week? Let’s discuss in the comments!