β#worldnews #Fed #BTC β
π Fed: Can the US avoid recession?
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Markets hope Alan Greenspan's famous "the worse for the economy, the better for the markets" principle will work again and save the US from disaster. The Feds have held their target rate range at 5.25%- 5.5% for 14 months and are beginning to ease policy just before the US election.
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Republican Trump has promised to impose stiff tariffs and extend tax cuts, which will help the dollar unfavorably and accelerate inflation. Democrat Harris proposed raising the tax rate to 28%, cutting corporate profits by about 5%.
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US retail sales showed growth weaker than inflation, i.e., a decline in sales in real terms. In our view, the statistics will not have a meaningful impact on tomorrow's Fed decision. However, the weakness in consumer demand may prompt the Fed to cut the rate faster in the future.
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The S&P 500 Index, Treasuries, and gold usually rise when the Fed starts to cut rates. Traders are left to position themselves for lower borrowing costs and a relatively stable economy
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Let's look at a few possible developments:β’ A 50bp rate cut will lead to impulsive growth in the stock market and crypto. The probability of this scenario is 30%
β’ A 50 bp rate cut, stock market growth, and crypto fall (maybe after the first green impulsive candle), i.e., the algorithm buys the rumor, and the news is realized. Probability: 30%
β’ A 25bp rate cut will lead to a sharp fall. BTC will once again test the lower boundary of the descending channel. Probability: 40%
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In total, 60% are in favor of 50 bps with different market reaction variants and 40% are in favor of 25 bps with an unambiguous reaction. We remind you that this is a very subjective assessment during the market "casino" period. We advise you not to play this lottery; at least partially stay in the cache and enter the market after the publication of the rate decision.
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Profits to yβall!