The Trader in Me is Nervous About Fed Rate Cut Talk. Here’s Why: Godbole
The post The Trader in Me is Nervous About Fed Rate Cut Talk. Here’s Why: Godbole appeared on BitcoinEthereumNews.com. Yes, you read that right. The growing chatter of fresh Federal Reserve rate cuts is making me uneasy. If I were a trader today, I’d be watching price dips below short-term moving averages closely, bracing for what might unfold into a major sell-off. But before I dive into the why, let’s rewind to last Friday. Powell opened the door to a September rate cut Fed chair Jerome Powell appeared to support Fed rate cuts during his speech at Friday’s Jackson Hole. According to RaboResearch’s Global Economics and Markets team the key phrase in Powell’s speech was, “with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” Powell even acknowledged that “downside risks to employment are rising,” leaving the door open to rate cuts in September—though without any commitment. These comments ratcheted up Fed rate cut bets, sending markets, including bitcoin and ether, sharply higher. These expected cuts arrive amid record-high fiscal spending, record valuations in stocks and crypto, a record M2 money supply not just in the U.S., but worldwide, and near-absent volatility across assets. This cocktail begs the question: how much more will cheaper borrowing cost truly move the needle? Newsletter service LondonCryptoClub’s founders offer this perspective: “Incrementally rate cuts will have an impact on markets, but there’s much bigger drivers than the Fed right now driving this bull market. We have global monetary easing and rising stimulus, with global M2 on a tear. The US is still running wartime-level deficits of over 6% and other major economies are also ramping up their fiscal policies. The U.S. Treasury is also engaging in the ‘treasury QE’ to artificially suppress the yield curve by loading the debt issuance to the front end of the curve via T-bills.” In other words, the…
The post The Trader in Me is Nervous About Fed Rate Cut Talk. Here’s Why: Godbole appeared on BitcoinEthereumNews.com.
Yes, you read that right. The growing chatter of fresh Federal Reserve rate cuts is making me uneasy. If I were a trader today, I’d be watching price dips below short-term moving averages closely, bracing for what might unfold into a major sell-off. But before I dive into the why, let’s rewind to last Friday. Powell opened the door to a September rate cut Fed chair Jerome Powell appeared to support Fed rate cuts during his speech at Friday’s Jackson Hole. According to RaboResearch’s Global Economics and Markets team the key phrase in Powell’s speech was, “with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” Powell even acknowledged that “downside risks to employment are rising,” leaving the door open to rate cuts in September—though without any commitment. These comments ratcheted up Fed rate cut bets, sending markets, including bitcoin and ether, sharply higher. These expected cuts arrive amid record-high fiscal spending, record valuations in stocks and crypto, a record M2 money supply not just in the U.S., but worldwide, and near-absent volatility across assets. This cocktail begs the question: how much more will cheaper borrowing cost truly move the needle? Newsletter service LondonCryptoClub’s founders offer this perspective: “Incrementally rate cuts will have an impact on markets, but there’s much bigger drivers than the Fed right now driving this bull market. We have global monetary easing and rising stimulus, with global M2 on a tear. The US is still running wartime-level deficits of over 6% and other major economies are also ramping up their fiscal policies. The U.S. Treasury is also engaging in the ‘treasury QE’ to artificially suppress the yield curve by loading the debt issuance to the front end of the curve via T-bills.” In other words, the…
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