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The Federal Reserve concluded its two-day March meeting and announced its decision: maintaining the federal funds rate at 5.25-5.5%. It also maintained the expectation of three interest rate cuts within 2024.
With this announcement, risk assets surged, with the S&P 500 index suddenly rising, breaking through a historic high of 5240 points. Safe-haven assets surged as well, with gold, which had been hovering for days, suddenly rising, breaking through a historical high of $2200 per ounce. Cryptocurrency assets also surged, with Bitcoin ending its testing of support levels, turning upward and surging to $67-68k, leaving the 30-day moving average far behind.
It is remembered that on March 16th, the Jiaolian article "BTC may not have a long-term basis for decline at the current stage." Backtesting the 30-day moving average is healthier. Time exchanges space, laying a more solid foundation for continuing the bull market in the future.
For those who listened to the bears and panicked to get off the bus, or those who coveted new lows and dared not get on the bus, they are now going to be dumbfounded and speechless again. When the big cake (Bitcoin) surged, they hoped it would reverse and pick them up. But when the big cake really reversed to pick up people, they hesitated and couldn't get on the bus. Even the gods can't help them.
So the eight-character secret of the Jiaolian is "buy on dips" rather than "buy on lows." Because almost everyone can't accurately catch the bottom. Including Jiaolian himself.
It is precisely because it is impossible to determine what is "low," so when there is a chance to bargain during a big drop, you have to get in.
If you don't buy when it's on sale, then wait until it rises in price to buy.
The Federal Reserve is now obviously determined to pave the way for interest rate cuts even if it means turning a blind eye. This echoes what Jiaolian said as early as March 9th: "The Federal Reserve smells the crisis!" (Liu Jiaolian's article on March 9th, 2024, "Bitcoin, gold hit historic highs: Federal Reserve smells the crisis!")
In the article on March 20th, "Japan ends negative interest rates, will the Federal Reserve kneel under Mrs. Watanabe's pomegranate skirt?" Jiaolian pointed out, "Now that the Bank of Japan has raised interest rates, this has thrown a difficult problem to the Federal Reserve: whether to continue maintaining high interest rates or even raise them further to maintain the arbitrage space and retain Mrs. Watanabe; or to follow the trend and lower interest rates, inject liquidity, fill the void left by the departure of Mrs. Watanabe, and support asset prices?
The Federal Reserve seems to have two options, but in fact, there may be only one mandatory option, which is--interest rate cuts and liquidity injection. Because with the addition of trillions of dollars in U.S. Treasury bonds every day, if they continue to support them so hard without killing their opponents in the East, they may collapse first.
In fact, as early as last year, the author speculated that it is necessary for the Federal Reserve to cut interest rates by mid-2024 or before the third quarter. The basis for speculation at that time was the excessive issuance of U.S. Treasury bonds by the U.S. Treasury under Yellen's leadership, promising to buy them back the following year, which is 2024. At that time, the internal reference was written like this: "So you can see that when Yellen issued a lot of bonds in August, she even issued a few more, saying that she would borrow some rice today and buy it back next year. Next year, buy back high-yield bonds and replace them with low-yield bonds. This is a strategy to reduce the burden. If this is the plan, then Powell must cooperate with reducing the interest rate before the replacement."
Why do we say that the Federal Reserve suddenly "turns a blind eye" to the inflation that has been hanging on its lips like a "decree" for days? Let's briefly review the tracking reports on the macro level in the past few days in Jiaolian's internal reference:
Jiaolian's internal reference on March 12th, "Will the Ethereum Cancun upgrade open up upward space?": "The main and core annual inflation rates are slightly higher than expected." "At the same time, monthly consumer prices and core consumer prices rose by 0.4%."
Jiaolian's internal reference on March 13th, "The Ethereum Cancun upgrade is completed, helping L2 block new public chains": "Stronger-than-expected U.S. inflation data further casts a shadow on the prospect of when the Federal Reserve will start cutting interest rates. Tuesday's data showed that the overall inflation rate in the United States accelerated to 3.2% in February, higher |
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Post time 29-3-2024 20:36:59