The US PPI data for October was released last night, showing that inflation control is stagnant, and the US stock market did not react violently, but Bitcoin fell below the $89,000 mark.

US Federal Reserve Chairman Powell released hawkish remarks at an event in Dallas this (15th) morning Taiwan time. He said the US economy has performed very well recently, giving the central bank room for cautious rate cuts, and that a gradual rate cut would be wise if the economic data allows, as the economy is approaching the so-called neutral rate level.

The economy has not sent any signal that urgently needs a rate cut, and the relatively good economic conditions allow us to be cautious in decision-making.

The appearance of the hawkish signal, coupled with the subsidence of the post-election market, both Bitcoin and the four major US stock indices fell earlier.

Bitcoin once fell below $87,000

Bitcoin first had a rapid decline after the US stock market opened last night, and then fell again after Powell's speech around 4 am, reaching a low of $86,666 around 7:30 am, a drop of 2.76% in the past 24 hours.

Market expects the probability of a 1-point rate cut by the Fed in December to drop to 58%

On the other hand, the Bureau of Labor Statistics also released data last (14th) night showing that the US PPI rose 0.2% month-on-month in October, with the previous value revised up from 0% to 1%, which was in line with expectations, but the October PPI index was still higher than September; the year-on-year PPI in October rose to 2.4%, higher than the previous market estimate of 2.3%, and also higher than the 1.8% increase in September.

At the same time, the core PPI excluding food and energy rose 0.3% from September, higher than the 0.2% increase in September and also higher than the market's previous expectation; the year-on-year increase was 3.1%, higher than the estimate of 3.0% and the 2.8% in September.

This shows that US October PPI data indicates that US inflation still has stickiness, so the market believes that the Fed will take a more cautious approach in its subsequent interest rate decisions.

As of the time of writing, according to the CME Group's Fed Watch tool, the market expects the probability of the Fed cutting rates by 1 point in December has dropped significantly from 82.5% the previous day to 58.9%, and the probability of keeping the current interest rate unchanged has risen to 41.1%.

The four major US stock indices all fell

The four major US stock indices also all fell last night:

• The Dow Jones Industrial Average fell 207.33 points or 0.47% to close at 43,750.86 points
• The S&P 500 Index fell 36.21 points or 0.61% to close at 5,949.17 points
• The Nasdaq Composite Index fell 123.07 points or 0.64% to close at 19,107.65 points
• The Philadelphia Semiconductor Index fell slightly by 1.70 points or 0.03% to close at 5,004.59 points

Wall Street analyst: The fear index shows that the US stock market will remain healthy by the end of the year

After Trump's victory, the US stock market continued to surge, but as the market capitalization of US stocks has become increasingly high, many investors have also begun to worry whether the bubble is on the verge of bursting.

In this regard, Nicholas Colas, founder of Wall Street research firm DataTrek Research, recently said that he expects the fear index (VIX), which measures market bubbles, to remain at a healthy level by the end of the year:

The fear index can provide traders with guidance on the health of the market, and although the US stock indices hit new all-time highs on Monday, the fear index is still in a healthy state, and it is likely to remain healthy by the end of this year.

However, Karen Karniol-Tambour, chief investment officer of the world's largest hedge fund Bridgewater, has also recently warned investors that although US stocks still have some upside potential, the current exposure level is no longer suitable for continued buying:

What you can't ignore is that people's exposure to the stock market today is very different from normal, and the risk is now very high.

Trump's victory has certainly been beneficial to growth in some ways, but you also need to be aware that Trump may also lead to a rebound in inflation, and although the outlook for the stock market is still optimistic, you need to learn to diversify your investments.