Matrixport Research: The Federal Reserve may enter an orderly rate-cutting cycle, which is beneficial for risk assets
A 25 basis point rate cut has become a high-probability event, and volatility may significantly increase next week.The Consumer Price Index (CPI) and Producer Price Index (PPI) for August have been released this week. The PPI report shows that wholesale prices rose by 0.2% month-on-month, slightly higher than economists' expectations, while year-on-year it increased by 1.7%, in line with expectations. The CPI data was released below market expectations.
A 25 basis point rate cut has become highly likely, raising market expectations for the Federal Reserve to cut rates next week.
After the data was released, financial asset prices showed an upward trend, with leading cryptocurrencies like BTC entering a rebound phase on the 12th, although profits are currently being taken. Next week's Federal Reserve interest rate decision meeting is crucial, the first rate cut after high rates usually has a significant impact on the market, and it cannot be ruled out that volatility in the cryptocurrency market may increase significantly next week, but the upcoming elections may offset some of the volatility.
If the Federal Reserve enters an orderly rate-cutting cycle, it will benefit risk assets. Rate cuts will lead to an increase in global money supply, enhancing market purchasing power and resulting in currency depreciation. This will further increase investors' risk appetite, seeking asset appreciation.
The presidential debate has concluded, and it remains difficult to determine who will win the U.S. presidency.
Regarding the latest presidential debate between Harris and Trump, the market is still reacting, with mixed opinions about the two candidates.
Trump, who has included cryptocurrency assets as part of his campaign strategy, has no updates on how he plans to improve the lives of the American people, and voters are looking forward to him presenting a refreshing new narrative. Choosing JD Vance as his vice-presidential candidate indicates that Trump's campaign focus remains on the "Rust Belt." However, his policies have not changed significantly, with the core still being to impose double tariffs on Chinese imports.
Harris has not made any specific statements regarding policies directly involving BTC or cryptocurrency assets, so any impact is possible. The Democratic Party takes a more cautious approach to cryptocurrency assets, primarily focusing on regulation, consumer protection, anti-money laundering compliance, and combating bribery and market manipulation. Harris's administration may prioritize tightening regulatory policies on cryptocurrency trading platforms, stablecoins, and DeFi platforms.
The four-year U.S. presidential term coincides with a complete BTC cycle, and under the leadership of the new president, BTC is destined to experience many unexpected events and significant price fluctuations in the next four years.
Some of the above views are from Matrix on Target, contact us for the complete report on Matrix on Target.
Disclaimer: The market has risks, and investment should be cautious. This article does not constitute investment advice. Digital asset trading may carry significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.
