LATEST: 🎯 CryptoQuant analysts say Bitcoin's rally could extend toward $112,000 if the Fed turns more decisively dovish and BTC breaks key resistance levels at $99,000 and $102,000. https://t.co/DPRgdPN5Wk ...

Fed's Monetary Policy Stance - The market interprets the Fed's recent moves as dovish, suggesting potential future rate cuts, though possibly not in January or March [2] - The Fed's decision to buy T-bills is viewed as a dovish signal [2] - Some analysts believe the Fed is trying to prevent a potential crisis by injecting liquidity [4] - The market initially reacted to the news with a sell-off in miners, but then reversed course, anticipating a rise in gold prices due to potential QE [5] - The Fed is committed to a 2% inflation target [13] - The Fed was influenced by the Employment Cost Index (ECI), which showed wage growth at 35% [15] Market Reactions and Expectations - The bond market's reaction to the Fed's moves was less pronounced than expected, with two-year Treasury yields down by 0007% to 0008% [3] - Small caps finished at all-time highs [11] - The market closed up 0070% intraday [11] - The market anticipates a Santa Claus rally [13]

Core Viewpoint - The Federal Reserve is expected to cut interest rates by a quarter of a point, but the commentary following the cut is likely to be hawkish, indicating a divided stance within the committee [1][2]. Group 1: Interest Rate Expectations - Traders are pricing in a nearly 90% chance of a rate cut by the Federal Reserve [1]. - There is dissent among FOMC committee members, suggesting that while a cut may occur, future cuts are not guaranteed, particularly in January [2][3]. - The market's expectation for rate cuts next year may not be sustainable, as the recent rally has been driven by liquidity and the anticipation of easier monetary policy [4]. Group 2: Economic Indicators and Risks - There is no compelling reason for the Fed to cut rates if inflation remains around 3% and economic growth continues at its current pace, which could lead to higher interest rates [5]. - High valuation speculative investments, including cryptocurrencies and meme stocks, are heavily influenced by liquidity and expectations of a dovish Fed, posing risks to the broader market [6].

We've seen this sort of global hint towards inflation concerns. Yesterday it was the ECB, last week it was Japan. Today, the RBA talking a little about inflation.A previous guest on this program was not worried much about certainly US inflation. How concerned are you around the inflation theme and the higher yield seen that seems to be building. Yeah, I mean, certainly the higher yields seem I think it's something to take seriously.This is actually pretty normal behavior for markets. So what you see is that ...

Core Viewpoint - The Federal Reserve's recent decision to implement a hawkish cut was largely anticipated by the market, indicating a balanced approach to its dual mandate despite concerns about the labor market [1][5][14] Market Reactions - The stock market closed flat following the Fed's announcement, with the 10-year yield also remaining stable, suggesting a lack of volatility in response to the news [6][8] - Over the past three months, the S&P has increased by approximately 10%, while gold prices have risen by 11%, indicating a unique market dynamic where both asset classes are performing well simultaneously [7] Interest Rate Expectations - Market expectations had priced in a 25 basis point cut, with speculation for additional cuts in the future, particularly three consecutive cuts [2][8] - There is a belief that the Fed may become more dovish as it approaches May 2026, when current Chair Powell's term ends, potentially leading to louder dissent among members [9] Economic Indicators - Upcoming inflation readings, particularly the PCE data, are anticipated to influence market sentiment and could be a source of concern for investors [6] - The Fed's message was interpreted as an "insurance cut," rather than the beginning of a new cutting cycle, reflecting ongoing worries about inflation [14]

Interest Rate Expectations - September rate cut likelihood dropped by 370 basis points after FOMC Minutes release [1] - Markets now see 82% odds of a September rate cut ahead of Jackson Hole [2] FOMC Meeting Highlights - Bowman & Waller dissented, favoring a 25 bps rate cut, signaling concerns about labor weakness and inflation [1] - "Almost all" other Fed officials backed holding rates at 425-450 bps [1] - Sticky inflation and upside surprises in recent data kept the Fed cautious on easing [1] - Powell balanced risks, viewing tariffs as "one-off shocks" rather than lasting inflation [2] Market Interpretation - Markets still perceived dovish undertones despite the majority's hawkish stance [2] - The pivot is anticipated, with the timing remaining uncertain [2]