Will the Federal Reserve definitely cut interest rates this week? Trump reiterates that BTC strategic reserves boost new highs!

CN
1 year ago

Macroeconomic Interpretation: This time we will discuss the analysis of the Federal Reserve's interest rate decision. This week, the Federal Reserve will hold its last interest rate decision of the year, and the market is widely focused and generally expects the Federal Reserve to continue to cut rates by 25 basis points. This expectation aligns with the general view on Wall Street, indicating that the Federal Reserve will maintain a loose monetary policy stance.

Goldman Sachs economists share a similar view and point out that the Federal Reserve may hint at a slowdown in future easing steps during this week's meeting. They predict that although the Federal Reserve will still cut rates by 25 basis points this week, the pace of future cuts will significantly slow down, and there may even be a pause in rate cuts in January next year. Goldman Sachs economists believe that this shift is due to the unemployment rate being lower than expected while inflation remains above target levels. Therefore, the Federal Reserve needs to seek a balance between maintaining economic growth and controlling inflation.

Meanwhile, Nick Timiraos from the "New Federal Reserve News Agency" has also expressed his views. He believes there are divisions within the Federal Reserve regarding rate cuts, with hawkish officials concerned that rate cuts could exacerbate inflation issues, while dovish officials focus more on the risks of slowing economic growth. In the face of this division, Federal Reserve Chairman Powell needs to balance policy adjustments to ensure the rationality and effectiveness of monetary policy.

From the market performance perspective, the U.S. labor market currently shows subtle signs, with both hiring and layoff rates at low levels, economic growth relatively stable, but the unemployment rate has risen. Additionally, some interest rate-sensitive sectors, such as the housing market, have not yet fully benefited from the impact of rate cuts. Therefore, the Federal Reserve needs to consider various factors comprehensively when adjusting monetary policy to ensure the rationality and targeting of its policies.

Analysis of the Impact of the Federal Reserve's Rate Cut on the Crypto Market: The Federal Reserve's rate cut policy has also had a certain impact on the crypto market. On one hand, rate cuts help to enhance market liquidity and reduce financing costs, which may drive an increase in trading volume in the crypto market. On the other hand, rate cuts may also lead to some funds flowing into traditional financial markets, creating a certain pressure of capital diversion from the crypto market.

However, in the long run, the Federal Reserve's monetary policy adjustments will have a profound impact on the future development of the crypto market. As the global economy continues to change and financial markets become increasingly complex, the crypto market needs to closely monitor the policy dynamics of central banks like the Federal Reserve to formulate reasonable investment strategies and risk prevention measures.

BTC Analysis:

BTC experienced a drop followed by a rise last week, falling from around $101,350 to a low of $94,150 near the trend line twice, which aligns with our prediction last week that "the closing price is temporarily above the rising trend line, and if it does not break, it is expected to continue the recent overall oscillating upward trend." It then began a rebound-oscillation-rise, reaching a daily high of $106,648, setting a new historical high. After the U.S. stock market reached a historical high last week, it saw a slight pullback, with overall trends relatively aligned. This week is a super central bank week, with the market expecting nearly a 100% probability of a rate cut in this Federal Reserve interest rate decision, and multiple economic data releases are expected to show more interconnected performance. The intraday rise was also mainly influenced by Trump’s renewed proposal to establish a Bitcoin strategic reserve.

After a bullish candle was reported in the morning, it is expected that the overall trend will rise first and then pull back. It has already set a new historical high, and there are no historical resistance levels to reference above except for recent highs. Support levels to reference below are the weekend pullback lows of $100,610 and around $99,212. As long as these levels are not broken, the market is likely to continue its bullish trend. The trend indicator at the 4-hour level has shown bullish signals since December 12, and it may be considered to maintain a right-side trading approach focused on buying during pullbacks.

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