High-Interest-Rate Trading May Have Only Just Been Repriced

The most noteworthy aspect of this Fed rate hike is that it did not signal that “once the hike is done, it’s over” to the market. The September meeting unanimously approved a 25bp rate hike, and the dot plot further showed that most officials expect tightening could continue this year.

This means market trading logic may be changing: in the past, everyone was discussing “when will rates be cut?” Now it has reverted to “when will the next rate hike come?”

In this environment, it is not surprising to see the US dollar and Treasury yields strengthen. A renewed rise in risk-free rates will increase funding costs for stocks, gold, and crypto assets. In particular, after BTC’s significant rally, the market is naturally more sensitive to highly valued assets. #美联储三年来首次加息25个基点

But this does not mean BTC must fall all the way. The rate hike has been implemented, and some expectations had already been reflected in prices. Going forward, what truly determines market direction will still be inflation, employment, and the next FOMC signal.

So instead of betting that “the bad news is over,” it is better to split up your positions. Continue monitoring core holdings, and wait for volatility to be released before adding new positions. The market never lacks opportunities; what is lacking is the ability to keep one’s hands under control when the timing is wrong.