Dot matrix chart leans hawkish, market reaction is overly aggressive

┈➤ The dot matrix chart leaning hawkish is certain
Forecast for 2026:
1 person predicts one rate cut
9 people predict no change
3 people predict one rate hike
5 people predict two rate hikes
1 person predicts three rate hikes
Compared to the last dot matrix chart, which still predicted rate cuts as a surprise, it has now shifted to predicting rate hikes as a surprise.
┈➤ Market reaction is overly aggressive
In fact, according to the dot matrix forecast, Federal Reserve officials on average predict a 0.79% rate increase in 2026.
Previously, CME interest rate futures showed that the market expected one rate hike between December and January 2027.
So, the dot matrix basically aligns with expectations, at most slightly worse than expected.
Currently, CME interest rate futures indicate that the September expectation for the rate is 3.75% to 4.0%, whereas now it’s 3.5% to 3.75%, meaning the September expectation is quite likely for a rate hike.
The issue is, looking at market expectations for October to December, they are also 3.75% to 4.0%, which means the current market expectation is essentially for one rate hike in 2026.
The higher probability forecast for January 2027 is 4.0% to 3.75%, but that probability is only slightly higher.
So, it’s almost still expected that from 2026 to January 2027, there will be 1 to 2 rate hikes, with at most a slight change from the original expectation of one rate hike.
The September rate hike expectation is because CME interest rate futures, which are also trading products, have emotional and speculative components when traders buy these products.
From this, we can see that the market is digesting the hawkish sentiment of the dot matrix chart and is in an irrational state.
┈➤ Final words
Under this emotional influence, the Nasdaq 100 fell 0.99%, and BTC did not break below 64,000.
BTC may have already dropped in advance on June 5-6.
Next, it mainly depends on whether Trump and Iran can sign the memorandum of understanding.
Will Trump regret again and do something that pushes oil prices up?
If there is no bigger negative news, BTC may not necessarily decline.
Brother Feng believes that BTC’s three dips will occur in September, which is after Wash’s appointment and a quarter of adjustment and research with Fed officials, and the Fed may have a policy direction.
Compared to the earlier drop, Brother Feng guesses that US stocks may continue to adjust.
He previously analyzed that, two months after the U.S. president’s visit to China, US stocks have a certain probability of falling.
Of course, further multi-angle research is needed in this area.