interest rate cuts

4E: The expectation of a pause in interest rate cuts next year has weakened the US stock market. This week, attention is on the Federal Reserve's interest rate meeting

ChainCatcher news, according to 4E monitoring, the S&P 500 halted a three-week winning streak last week, falling 0.64% for the week; the Dow Jones dropped a cumulative 1.82% over the week, marking seven consecutive trading days of decline; the Nasdaq gained a cumulative 0.34% over the week, breaking the 20,000 point mark for the first time in history.Bitcoin rose back above $100,000 last week, setting a record for the longest seven-week winning streak since 2021. The altcoin market saw a decrease in enthusiasm, with a general pullback. Over the week, Bitcoin ETFs saw a net inflow of $2.115 billion, Ethereum ETFs had a net inflow of about $712.7 million, and the supply of stablecoins increased by $2.1 billion, indicating a sustained positive outlook for funds. As of the time of publication, Bitcoin surged suddenly, breaking its historical high to reach $106,648, with the top ten cryptocurrencies also seeing an increase of nearly 1% to 4%.In the forex commodities sector, the US dollar index performed strongly last week, breaking above 107 on Friday and continuously refreshing a two-week high, with a weekly increase of nearly 1%, marking the best weekly performance in a month, while non-USD currencies fell cumulatively over the week. International oil prices surged across the board last week due to geopolitical tensions, halting two weeks of declines, with US oil rising over 6% for the week and Brent oil increasing by 4.54%. Benefiting from market expectations of an upcoming interest rate cut by the Federal Reserve next week, spot gold rose a cumulative 0.56% over the week.The most anticipated economic event this week is the FOMC meeting to be held by the Federal Reserve on Wednesday, followed by the announcement of interest rate decisions and quarterly economic forecasts on Thursday. The market has already fully priced in expectations for a 25 basis point rate cut in December, with the real focus being on clues regarding the future direction of Federal Reserve policy. The market expects that rate cuts next year will be more cautious and gradual, with a possibility of pausing rate cuts in January.Additionally, this week marks the last "central bank super week" of 2024, with up to 25 central banks, including those from Japan, the UK, and Sweden, meeting in the same week. The decisions from some key central banks may trigger market volatility, especially in the fast-paced forex and commodities markets. eeee.com is a financial trading platform that supports assets such as cryptocurrencies, stock indices, commodities like gold, and forex, recently launching a USDT stablecoin wealth management product with an annualized return of 5.5%, providing investors with a potential hedging option. 4E reminds you to be aware of market volatility risks and to allocate assets wisely.

Institution: Beware of the risk of inflation rising again in 2025, the Federal Reserve may be forced to slow down interest rate cuts or even restart rate hikes

ChainCatcher news, according to Jinshi reports, multiple Wall Street institutions warn that the risk of a rebound in U.S. inflation in 2025 is increasing. Goldman Sachs Chief Economist Jan Hatzius predicts that if Trump's tariff proposal is implemented, it could push the core PCE index, which the Federal Reserve focuses on, up by nearly 1%. Anders Persson, CIO of Nuveen Global Fixed Income, which manages $1.3 trillion in assets, stated that inflation rates may remain above the Federal Reserve's 2% target for the next 12 months and even for several years; in the worst-case scenario, the Federal Reserve may be forced to pivot 180 degrees and restart interest rate hikes, leading to more severe stagflation.The market expects that the CPI data for November, to be released this Wednesday, will continue to rise, with the core CPI annual rate possibly remaining above 2% until October next year. Derek Tang, an economist at Monetary Policy Analytics, pointed out that if the CPI data exceeds expectations and the previous values are revised upward, it could change policymakers' assessment of inflation and affect the pace of interest rate cuts in 2025. In the current situation, Nuveen recommends focusing on fixed income assets, expecting that U.S. Treasury yields will provide substantial returns over the next 12 months; if the economy falls into stagflation, cash may become the best-performing asset class.

4E: The US stock and cryptocurrency markets remain active, with this week's CPI data being crucial for the Federal Reserve's interest rate cut in December

ChainCatcher news, data released last Friday showed that non-farm employment was better than expected, and the unemployment rate slightly increased, reinforcing expectations for a rate cut in December, with the market estimating the likelihood of a rate cut in December rising to around 85%.According to 4E monitoring, last week, the surge in tech stocks pushed major U.S. stock indices to new highs, with the Nasdaq soaring over 3%, and the S&P 500 index rising nearly 1%. Both the Nasdaq and S&P reached new historical highs, while the Dow Jones was the only index to decline, falling about 0.5%.The cryptocurrency market is booming, with Bitcoin spot ETF funds experiencing a net inflow for a consecutive week, totaling nearly $2.8 billion. The market capitalization of stablecoins increased by $3.9653 billion, a growth of 2.56%. The strong inflow of funds led to Bitcoin breaking through the $100,000 mark and ETH surpassing the $4,000 level, with altcoins experiencing a comprehensive rally, resulting in several mainstream coins doubling in value. Currently, Bitcoin is consolidating around $100,000, providing opportunities for altcoins.In the forex commodities sector, the U.S. dollar continued to strengthen last week. After the non-farm data was released, the dollar significantly dropped but eventually turned upward, accumulating a weekly gain of 0.22%. The rise of the dollar limited the upward space for gold prices, but expectations of a rate cut provided support for prices, causing gold to fluctuate within a narrow range, with overall market sentiment being cautious. Oil prices fell for three consecutive days last week due to concerns over oversupply, with West Texas Intermediate crude oil dropping 1.17% for the week and Brent crude oil declining 1%.Recent data suggests that the progress of U.S. anti-inflation efforts may be stalling, and the CPI data to be released this Wednesday will be a determining factor for the Federal Reserve's interest rate decision this month. The market expects an approximately 85% chance of the Federal Reserve cutting rates by 25 basis points on December 18. However, expectations for fewer rate cuts next year are continuing to strengthen.Additionally, as the year-end approaches, large investment institutions are facing portfolio rebalancing to accommodate year-end reporting and tax issues, which may create a short-term liquidity shock in the U.S. stock market, potentially being the largest adverse factor in the near term, expected to suppress risk assets. eeee.com is a financial trading platform that supports assets such as cryptocurrencies, stock indices, gold commodities, and forex, recently launching a USDT stablecoin financial product with an annualized yield of 5.5%, providing investors with potential hedging options. 4E reminds you to pay attention to market volatility risks and to allocate assets reasonably.

Deutsche Bank: The Federal Reserve may delay interest rate cuts due to Trump's tariff policy, and inflationary pressures cannot be ignored

ChainCatcher news, according to Jinshi reports, Trump has promised to implement comprehensive tariffs on imported goods upon returning to the White House. During his first term, Federal Reserve staff simulated a similar scenario and concluded that inflation would accelerate but would not last long. Ultimately, they determined that tariffs were a drag on the economy and recommended lowering interest rates as the best remedy.However, there are two main obstacles to taking this approach now. First, the Federal Reserve has not fully overcome the post-pandemic price increase issue. Second, the Federal Reserve has faced severe criticism for describing that price increase as "transitory." Therefore, Powell and his colleagues are least willing to downplay the price surge, believing it will not be persistent.Justin Weder, an economist at Deutsche Bank in the U.S., stated, "Even a price increase viewed as transitory could prompt the Federal Reserve to raise interest rates, or at least keep them on the sidelines, preventing them from cutting rates significantly as they originally hoped. They must acknowledge the actual inflation rate. Perhaps they can avoid terms like 'transitory' or 'temporary' and instead say something like 'inflation is rising due to tariff effects,' clearly indicating that this is a result of tariffs and not necessarily demand-driven."

4E: Bitcoin's bullish sentiment in December is strong, and this week's "non-farm payrolls + Powell" will set the tone for year-end interest rate cuts

ChainCatcher news, the rise of the "Trump trade" in November has become a dominant factor driving global market trends. According to 4E monitoring, last week all three major U.S. stock indices rose, with weekly gains exceeding 1%. In November, the Dow Jones increased by 7.5% and the S&P rose by 5.7%, both marking the largest single-month gains of the year, while the Nasdaq accumulated over 6%. Large tech stocks saw widespread gains, with Tesla rising over 38% in November, achieving its best performance in nearly two years, and Nvidia accumulating a 179.23% increase this year. So far this year, the S&P 500 index has risen over 27%, compared to a 24% increase last year, leading to differing views on the outlook for U.S. stocks.The cryptocurrency market performed impressively in November, attracting widespread global attention. Bitcoin's monthly increase exceeded 37%, while Ethereum's rise reached 54%. Altcoins experienced significant gains at the end of the month, with market share continuously expanding; Bitcoin's market share has dropped by 8.15% from the peak of this bull market (61.78% on November 21), while the total market capitalization of altcoins rose nearly 70% in November. Historical data shows that Bitcoin has a significant average increase in December during the second half of the year, combined with the fact that most of Trump's cabinet are cryptocurrency investors, leading to strong bullish sentiment in the market.In the foreign exchange market, the dollar fell by 1.67% last week, ending an eight-week streak of gains, with a cumulative increase of 1.72% in November. The "Trump trade" boosted the dollar in November, hindering gold's upward momentum and triggering a sell-off after the election; spot gold fell about 3.7% in November, marking the largest monthly decline since September of last year. Oil prices continued to decline last week, with a weekly drop of over 3%.In recent weeks, investors have focused on Trump's various economic policies, but at the same time, the expectations for interest rate cuts by the Federal Reserve have also become quite nuanced. While the market expects an increased probability of a rate cut in December, the space for cuts in 2025 is continuously decreasing. The "near increase, far decrease" phenomenon largely reflects anxiety about the resurgence of inflation under a future Trump administration. This Thursday's speech by Powell and Friday's non-farm payroll data will largely set the tone for year-end rate cuts.eeee.com is a financial trading platform that supports assets such as cryptocurrencies, stock indices, precious metals, and foreign exchange. Recently, it launched a USDT stablecoin wealth management product with an annualized return of 5.5%, providing investors with potential hedging options. 4E reminds you to pay attention to market volatility risks and to allocate assets reasonably.
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