As soon as Waller spoke at Jackson Hole, the market's September script was overturned.
Waller's remarks at Jackson Hole pierced the market consensus of "status quo in September."
The core message is twofold: inflation remains above 2%, and financial conditions have not reached restrictive levels. Translated, this means interest rates should not only not be cut but there is even room for further tightening.
After the speech landed, the probability of a September rate hike priced by interest rate futures surged directly from 15% to nearly 40%, the 10-year US Treasury yield rose, and gold and BTC simultaneously came under pressure and pulled back.
What everyone fears is not a 25 basis point hike, but the complete overturning of the entire rate cut path. Previously, asset allocation and ETF buying were based on the assumption of "peak interest rates." Once the foundation shifts, all valuations must be recalculated.
What will determine BTC's fate next are the CPI, PCE, and nonfarm payroll data from late August to early September. As long as any of these show inflation stickiness, the market must face the reality of continued liquidity tightening; conversely, if inflation cools more than expected, this hawkish stance will be quickly disproven and a violent rebound will follow.
My judgment is that it is more likely that rates will remain unchanged in September. Waller seems more like he is sounding an alarm to prevent the market from prematurely overtrading easing and stimulating inflation to rise. During the vacuum period before the data is released, volatility is extremely high, and stabilizing position rhythm is far more important than blindly betting on direction.
Do you think there will be a rate hike in September or will they hold steady? Which macro indicator are you watching most closely?
Waller's remarks at Jackson Hole pierced the market consensus of "status quo in September."
The core message is twofold: inflation remains above 2%, and financial conditions have not reached restrictive levels. Translated, this means interest rates should not only not be cut but there is even room for further tightening.
After the speech landed, the probability of a September rate hike priced by interest rate futures surged directly from 15% to nearly 40%, the 10-year US Treasury yield rose, and gold and BTC simultaneously came under pressure and pulled back.
What everyone fears is not a 25 basis point hike, but the complete overturning of the entire rate cut path. Previously, asset allocation and ETF buying were based on the assumption of "peak interest rates." Once the foundation shifts, all valuations must be recalculated.
What will determine BTC's fate next are the CPI, PCE, and nonfarm payroll data from late August to early September. As long as any of these show inflation stickiness, the market must face the reality of continued liquidity tightening; conversely, if inflation cools more than expected, this hawkish stance will be quickly disproven and a violent rebound will follow.
My judgment is that it is more likely that rates will remain unchanged in September. Waller seems more like he is sounding an alarm to prevent the market from prematurely overtrading easing and stimulating inflation to rise. During the vacuum period before the data is released, volatility is extremely high, and stabilizing position rhythm is far more important than blindly betting on direction.
Do you think there will be a rate hike in September or will they hold steady? Which macro indicator are you watching most closely?