The Fed’s August CPI report showed core prices +0.3% m/m, hotter than expected. Markets have quickly priced in ~90% odds of a 25bp hike on Sept 16 a shift from the “no hike” talk earlier this year. This week’s Fed decision could be a turning point: if the FOMC does raise rates, it will mark the first hike in over a year.
What happens if rates go up? Generally, higher Fed rates push Treasury yields up and the dollar stronger, which tends to pressure speculative assets. We could see Bitcoin pull back amid a risk off move analysts note that Bitcoin’s recent 20% surge may not be sustained without stable yields and oil prices. Likewise, tech stocks (which have powered much of the rally) could lose steam as higher discount rates make future earnings less valuable. Even gold would likely feel short-term pressure: a Fed hike strengthens the dollar and raises opportunity costs of holding gold although gold can still rally on inflation or geopolitical fears.
My trading stance: I’m positioning cautiously. For example, I’m holding a modest BTC position while watching the Fed closely. If the hike is confirmed, I may trim some crypto exposure and tech longs, and consider adding to defensive plays (maybe more fiat or gold). I’ve just shared my portfolios with Binance’s trade-sharing widget check it out below to see my exact allocations.
Stay tuned: after the Fed decision and Chair Warsh’s press conference, markets will look for clues on future hikes. I’ll be watching the yield curve and Fed dots closely. What’s your plan? Use the #FedRateWatch hashtag and Binance’s trade-sharing widget to share your outlook we might all get a surprise boost in views if our posts stand out!
#FedRateWatch
#MooDCirCuiT
What happens if rates go up? Generally, higher Fed rates push Treasury yields up and the dollar stronger, which tends to pressure speculative assets. We could see Bitcoin pull back amid a risk off move analysts note that Bitcoin’s recent 20% surge may not be sustained without stable yields and oil prices. Likewise, tech stocks (which have powered much of the rally) could lose steam as higher discount rates make future earnings less valuable. Even gold would likely feel short-term pressure: a Fed hike strengthens the dollar and raises opportunity costs of holding gold although gold can still rally on inflation or geopolitical fears.
My trading stance: I’m positioning cautiously. For example, I’m holding a modest BTC position while watching the Fed closely. If the hike is confirmed, I may trim some crypto exposure and tech longs, and consider adding to defensive plays (maybe more fiat or gold). I’ve just shared my portfolios with Binance’s trade-sharing widget check it out below to see my exact allocations.
Stay tuned: after the Fed decision and Chair Warsh’s press conference, markets will look for clues on future hikes. I’ll be watching the yield curve and Fed dots closely. What’s your plan? Use the #FedRateWatch hashtag and Binance’s trade-sharing widget to share your outlook we might all get a surprise boost in views if our posts stand out!
#FedRateWatch
#MooDCirCuiT
