FOMC: Federal Reserve's September Rate Cut Expectation Boosts Ethereum's Momentum, Jackson Hole Symposium Next Focus
BlockBeats News, August 13th: QCP released its daily market observation, stating that the US July CPI (Consumer Price Index) increased by 2.7% year-on-year, lower than the market's expectation of 2.8%; the core CPI increased by 3.1% year-on-year, slightly higher than the expected 3.0%. The relatively moderate overall inflation reading has strengthened the market's expectation of the Fed starting a rate-cutting cycle in September, with most market participants currently expecting a 25 basis point cut. The commodity inflation, which was previously expected to rise due to companies passing on higher costs to consumers, performed lower than expected this time.
Following the data release, the market's rate-cut expectations for 2025 remained unchanged, with pricing still reflecting a rate-cut space of around 60 basis points. Despite the softening labor market and the market's expectation of a more dovish Fed chair in 2026, the terminal rate remains stable. Futures positions indicate that investors believe the Fed's rate floor in 2026 will be around 3%.
With several key risk events materializing, the US stock market continues to rise and hit new all-time highs. Regarding the tariff standoff, "TACO" remains a core reference for traders, as the tariff extension between the US and China has been prolonged by 90 days. The geopolitical situation in Ukraine and Russia has eased, with an escalation risk seen as a distant possibility, and a ceasefire or peace agreement has become the market's baseline scenario.
In the cryptocurrency market, investors holding ETH long-term have finally seen excitement, with the ETH price approaching its all-time high. The funding raised by Bitmine to establish an ETH treasury has attracted attention, with the market pointing out that any inflow of funds into ETH has a more significant impact compared to Bitcoin, as ETH has a smaller market cap and slightly lower liquidity. As long as funds continue to flow into ETH decentralized asset tokens (DAT), the current upward momentum of ETH is expected to continue.
Looking ahead, the Jackson Hole Symposium will be the next focus. It is expected that Fed officials will signal a 25 basis point rate cut in September. Before the September FOMC meeting, there is only one CPI and one non-farm payroll data release remaining, and it is believed that these data are unlikely to substantially alter the Fed's decision.
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