The Fed's interest rate cut:

1. Time node

The expected rate cut has two important time points: the Fed interest rate meetings on September 18 and November 7.

The U.S. general election will take place on November 5th, and unofficial results will be available on the night of the election or the next day. Official results will be released by the end of the year.

2, interest rate cut data

According to CME's data on the day, the probability of no rate cut on September 18 is 30.6%, a rate cut of 2.5 basis points is 57.2%, and a rate cut of 5 basis points is 12%. The overall probability of a rate cut is 69.4%.

On November 7th, the probability of no interest rate cut is 17.8%, a 2.5 basis point cut is 46.5%, a 5 basis point cut is 30.6%, and a 7.5 basis point cut is 5%. The overall probability of an interest rate cut is 82.4%.

3. Interest Rate Reduction Scenario Analysis

Considering the situation of the US presidential election, if the interest rate is cut two days before the election in November, it will be a favorable development. The financial market will dump during the election, causing market fluctuations and affecting the election results.

If the rate cut starts in September, there will still be 2 months until the November election. Even if the US stock market dumps and pulls back, there will be enough time to digest the short-term bubble and ensure stable stock market performance during the election period.

4. Conclusion

Overall, the probability of interest rate cuts starting in September is the highest.

If this inference is true, then there is the potential for a rate cut expectation in the financial markets in the 6-8 months, which is favorable for the US stock market and the encryption market.

Bitcoin is forming a trend of the main rising wave, and the encryption market will continue to rise after May, just a little weaker in the third quarter.

The Bitcoin ecosystem is rising, the higher the price of Bitcoin, the greater the opportunities for the entire ecosystem. Because institutions pump Bitcoin, retail investors who cannot afford Bitcoin will consider related ecosystems, which will further promote the related ecosystem.

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