The Night Before the Fed Decision: The Market Is Waiting for a Repricing

Without a doubt, the most important macro event this week is the Federal Reserve’s policy meeting.

What the market is truly focused on now is no longer just whether the Fed will raise rates or keep them unchanged, but how the Fed will evaluate inflation, employment, and energy prices—and whether the policy path ahead will change.

Recent U.S. employment data still shows a certain degree of resilience, which means the Fed has not immediately shifted toward easing. At the same time, oil prices have pulled back after geopolitical tensions eased, and concerns about energy-driven inflation have cooled. With one factor supporting the continued maintenance of high rates and the other weakening the need for further rate hikes, the market is clearly split.

So even if the final interest rate remains unchanged, it cannot simply be understood as a positive for risk assets. If, in its statement, the Fed continues to emphasize inflation risks or releases signals that policy could still tighten going forward, risk assets may still face pressure. Conversely, even with a cautious policy stance, once the market confirms that the probability of further rate hikes is falling, sentiment could recover quickly.

Besides the Fed, this week is also a dense earnings season for technology giants. The capital expenditures and AI investment returns of companies such as Microsoft, Meta, and Amazon will directly affect how the market values tech stocks. In the past, the market was willing to pay a high premium for the AI narrative, but going forward, what matters more is whether these investments can truly translate into revenue and profits.

The crypto market is also in a critical position. After Bitcoin returned to around $65,000, its near-term trend still depends heavily on macro liquidity. If the Fed’s language turns more hawkish and the U.S. dollar and U.S. Treasury yields strengthen, crypto assets may face renewed pressure. If policy expectations ease instead, the short positions accumulated earlier could end up driving a rapid rebound.

In my view, this week is not a one-variable market—it’s a week where oil prices, employment, tech earnings, and rate expectations are all being repriced together.

What may truly determine the direction is not the interest rate number itself, but the Fed’s stance on the next steps of policy. #夏日创作营 @Gate 广场