Wake up—the rate-cut dream is shattered.
Rate hikes may be coming by year-end.
This isn’t a joke. The interest rate futures market has fully priced it in: a 25bps rate hike before the end of 2026, earliest as early as October.
And three months ago, everyone was still betting on rate cuts.
How long have you been fooled by the “rate-cut consensus”?
In January this year, Fed Governor Waller publicly supported rate cuts. The market went into a frenzy: a bull market is coming—time to buy the dip!
By May, the same person, the same Waller, said the exact opposite:
“Rate cuts shouldn’t be the default plan anymore.”
Default plan? What a great choice of words. It shows that rate cuts were never a fact—they were just your one-sided faith and wishful thinking.
New chair, Wush. On May 23—his first day in office—he made three direct moves, straight to the point:
Limit forward guidance → Don’t expect me to tell you the answer in advance
Silence the officials → Anyone who keeps releasing dovish “bird-miss” signals—handle it yourselves
“A reform-oriented Fed” → Translation: I’m here to clean up inflation, not to flood the system with liquidity
The market understood in less than a day: the script has been changed.
Four numbers—tell you why rate hikes aren’t a joke
Don’t tell me what “the Fed wouldn’t dare to hike.” Look at these four sets of data:
Consumer confidence: the University of Michigan’s May final reading—lowest in history. Americans have never been this pessimistic.
Inflation expectations: the one-year figure was revised up from 4.5% to 4.8%. If expectations are still rising, how can prices come down?
30-year U.S. Treasury yields: the highest since 2007. Bond veterans are betting real money on rate hikes.
Interest rate futures: a 25bps hike by year-end, probability 100%, earliest as early as October.
Make it clear: the fourth item isn’t a “forecast”—it’s “pricing.” The market has already started placing its bets.
Bitcoin and gold falling together—how many times have you seen that?
Gold, the king of safe havens. Bitcoin, digital gold.
Normally, their price movements are often the opposite. But this time—they’re under the same pressure and falling in sync.
Why? Because the market is front-running one thing: liquidity is about to be tightened.
When two completely different assets get dumped at the same time, there’s only one reasonable explanation: someone is fleeing early—and running very seriously.
Are you still waiting for a “rate-cut bull”? Sorry—this time the rate-hike bear might arrive first.
What you think is a “bottom” may just be halfway up the hill.
Don’t use the old script—bet on the future with money that belongs there.
Rate cuts are what you want; rate hikes are what the market is pricing.
Wush taking office isn’t here to save your positions—it’s here to save the credibility of the dollar.
These words don’t sound nice. But in the last bull market, the people who lost the most were the ones who loved listening to pleasing talk.
So what should you do now?
First, stop putting “rate cuts by year-end” on your lips. That was last year’s story. This year’s story is “to hike or not to hike”—there are no rate cuts.
Second, check your leverage. U.S. Treasury yields surging means higher financing costs. Those positions propped up by low rates may be more fragile than you think.
Third, don’t fight interest rate futures. The market has already shifted from “hoping for rate cuts” to “pricing in rate hikes.” If you take it personally and throw a tantrum at the market, the market will throw money back at you.
Finally, what I want to say is:
I know what you’re thinking: “The Fed can’t possibly hike when inflation has just started to pick up—they’ll get criticized to death.”
So let me ask you: is Wush afraid of being criticized?
Someone who dares to restrict all officials’ speech on the very first day in office, and someone branded as an “anti-inflation fighter”—do you think he cares about retail investors’ complaints?
He doesn’t. What he cares about is inflation expectations becoming unanchored.
Rate hikes aren’t meant to punish you; they’re meant to punish inflation. You’re just the unlucky passerby caught in the crossfire.
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