Isn't it said that Chinese people generally have the sentiment of "a small people but a big country", just like people with a monthly salary of 3,000 are keen on paying attention to international current affairs and economic macro-economy, and from time to time they fantasize about the heroic and passionate feeling of pointing fingers at the world and making bold decisions. Even though my radish, pickled cabbage and tofu can't stop my kind-hearted heart from paying attention to the CPI of my big family. Now the information cocoons of each family have been broken, and it is clear how many holes there are in the lining of the luxurious coat. The CPI inflation data of my big family for April will also be announced soon .
The Bureau of Labor Statistics released the April CPI data on Wednesday night. This key inflation indicator will affect the direction of monetary policy and determine the market's expectations for the future path of monetary policy.
Market forecasts show that despite the surge in gasoline prices, the CPI may slightly drop to 3.4% year-on-year in April, maintaining a 0.4% increase from the previous month. The core CPI (excluding food and energy) is expected to slow for the first time in six months, slowing to 3.6% year-on-year, the lowest in nearly three years.
This trend brings a glimmer of hope for easing price pressures, but the CPI is still at a high level and the Federal Reserve remains cautious in its decision to cut interest rates , looking forward to clear signs of continued slowdown in inflation.
First, the Fed has made it clear that it is impossible to raise interest rates again, which is undoubtedly good news for the US financial market, which has been under pressure from high interest rates. However, this also means that the Fed has realized the negative impact of raising interest rates on the economy and has to make compromises.
Secondly, the Federal Reserve announced that it would reduce the scale of its outbound sales of Treasury bonds from $60 billion to $25 billion starting in June. This move is intended to ease tensions in the global market and avoid a market crash caused by a large-scale sale of Treasury bonds. However, this also exposed the helplessness and dilemma of the Federal Reserve in dealing with the global financial crisis .
Finally, the Fed also warned against trying to predict when they would cut interest rates, because they themselves don’t know. This statement is even more disturbing, because as one of the important central banks in the global economy, the impact of the Fed’s policy changes on the global financial market cannot be ignored. The Fed seems to be gambling that it can harvest enough global assets before the US financial industry is crushed by high interest rates.
The pressure index is soaring, and the pockets are empty. The money-making effect is getting worse and worse , and more and more investors are unwilling to trade. On the one hand, the purchasing power is weakening, and on the other hand, the selling pressure is also decreasing. This is the current situation. Those investors who want to buy have already acted, unless there is a new change in price or market sentiment, and those who want to sell have also decreased, unless there is a new negative trend. The market has been oscillating at this position for too long, and most investors have become numb.
Why is it so difficult to make money in the crypto at this stage?
The Bitcoin ETF has been approved, and OTC funds have also begun to enter the market. The market has become more and more formal, and the market has become larger. After the entry of large funds, it is difficult for ordinary institutions and whale to manipulate the market. I personally feel that Wall Street capital is likely to control the future market. After the hegemony of the US dollar weakens, these capitals need to find new ways to harvest, and the crypto may be a good choice. The formalization of the market is a good thing, but the myth of wealth creation in the previous rounds may be over, and the profits that retail investors can make will become less and less.
The wealth created in several rounds of bull markets was due to the initial information gap. If you lurk early when no one is interested or in the project crowdfunding stage, you can make a fortune when liquidity and attention reach a climax. However, now project owners use high market value as investment guarantee. Internal and big whales have already built up rat warehouses before the project goes public. Good news and FOMO are always teasing your wealth nerves. By the time you make up your mind and fall in love, you have been labeled as a "leek receiver". You watch your account shrinking, the project owners paddling, and the big whales spraying water in the swimming pool.
Back to policy, if CPI continues to rise and the Fed does not cut interest rates, will a bear market come?
Generally speaking, if there is an economic recession or crisis, the Fed will adopt a loose monetary policy to promote a rapid recovery in the market. However, if the economy is in good condition, the Fed may avoid loose monetary policy. In this case, even if there is no interest rate cut, the liquidity of the market will slowly increase and recover, but it may take some time, at least until after 2026.
A rate cut itself will not significantly increase liquidity. What really increases liquidity is the policy of loosening the money supply. The main advantage of a rate cut is that it marks the final stage of the Fed's tightening policy, preparing for the market's expected loosening of money supply. Therefore, a rate cut does not mean releasing liquidity.
Some people are worried that if interest rates are not cut, a "bear market" will come.
Failure to cut interest rates will not lead to a bear market, but it will increase uncertainty in the risk market, increase the possibility of an economic recession, and ultimately lead to negative results. But this is only a probability possibility. It can be said that every day that interest rates are kept high, the possibility of a black swan event will increase.
But don’t forget that policies will change, and the key lies in who will sign them? The election of the big beautiful family is nothing more than two old men, Biden and Trump, who like to play the opposite tune. Biden’s dislike of encryption is well known, but Trump embraced encryption during the campaign and issued his own NFT. Whoever is elected will directly affect the development of encryption.
Things that seem to have little to do with crypto, such as interest rate hikes, interest rate cuts, wars, and elections, actually directly affect the trend of crypto.
Encryption is becoming less and less pure.
