The CPI and PPI data have been very promising over the slow down of the inflation rates in the U.S. Although investors expected to see " god candles " in the charts, they did not occur because the new narrative was totally different from the inflation. The sharp decrease, which was presumed as a result of lower rates than the expected data, was interpreted as a sign of recession in the U.S economy.
As the risk of recession is said to come about, the risky markets have started to go over harder times than before. Crypto, NASDAQ, S&P and several other markets have lost decent value due to the risk surrounding the world.
While it might have a valid point to be scared, the current state of the market is close to being an overreaction as there has not been enough occasions to come to the conclusion that all the markets have to go down as the businesses will bankrupt soon. The majority is aware of the unreasonable approach in the tech-driven marketplaces.
Here is something that shows the exact opposite of what the investors expect today:
If someone checks the charts, s/he may asume that there won't be anything positive in this year considering the performance, the lower lows in the daily timeframes, but the reality is that the probability of 3 interest rate cuts is at the highest level since the beginning of the year.
3 Interest rate cuts clearly mean that there will be more liquidity in the markets, more push on the risky investment options and reversal in the stocks and cryptocurrencies that have been bleeding out for some time!
The investors do not believe that there will be interest rate cuts by June, however, from June to December, it is assumed that we may see up to 3 interest rate cuts by the Federal Reserve.
For a crypto investor, it is a matter of time and patience to keep hodling the crypto bag until the geopolitical risks are eliminated and the countries start to have an easier monetary policy. This is not the first time we will be waiting for the FED, rather, it is something that we all are excellent with.
What do you think about the expectations of the investors in terms of interest rate cuts by the FED?
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