A Rate Hike Is Highly Likely, but the Dot Plot Is the Real Test

For this Fed meeting, I lean toward a 25-basis-point rate hike being delivered. August CPI rose 3.4% year over year, while core CPI increased 0.3% month over month. Inflationary stickiness remains, and the market has now priced the probability of a rate hike at nearly 90%.

Therefore, the rate hike itself is not the biggest risk. What really deserves attention is the dot plot and the press conference. If the dot plot shows room for further rate hikes this year, the market may resume trading on “higher rates for longer,” sending the dollar and Treasury yields higher while weighing on BTC and U.S. stocks.

But if the 25-basis-point hike amounts to “the shoe dropping,” while Powell sends cautious signals, the market may instead see the negative news fully priced in. Recent analyses have suggested that if a rate hike is fully priced in, its impact on assets may not continue to intensify.

My strategy is not to chase rallies or sell into declines before the meeting. Afterward, I will focus on the direction of the dollar and the 10-year U.S. Treasury yield. What truly determines market moves has never been the words “rate hike” themselves, but how the Fed tells the market it plans to proceed next. #每周来晒 and #美联储加息会议