Fed's "Dovish" Tone Boosts Rate Cut Expectations, Bitcoin Hits New High!

Fed's "Dovish" Tone Boosts Rate Cut Expectations, Bitcoin Hits New High!The US CPI data for October met expectations, rising 2.6% year-on-year and 0

Fed's "Dovish" Tone Boosts Rate Cut Expectations, Bitcoin Hits New High!

US major stock indices closed mixed, with the Dow Jones Industrial Average up 0.11%, the S&P 500 up 0.02%, and the Nasdaq down 0.26%. Chip stocks saw widespread declines, with Micron Technology down 4.02%, Texas Instruments down 3.32%, AMD down 3.01%, and TSMC down 2.62%. Most Chinese stocks declined, with the Nasdaq Golden Dragon China Index down 1.09%, NetEase down 2.79%, Tencent Holdings down 1.78%, and JD.com down 1.14%.

The US CPI data for October met expectations, rising 2.6% year-on-year and 0.2% month-on-month. Wall Street analysts expect a 25 basis point rate cut by the Federal Reserve in December to be a done deal. Following the release of the inflation data, traders increased their bets on a December rate cut. The CME FedWatch tool showed the probability of a Fed rate cut in December soared to 79.3%, up from less than 60% the previous day.

Fed officials have been sending out "dovish" signals, hinting at a rate cut. Fed official Logan stated that the Fed may need to cut rates further but should "proceed cautiously." He said it was difficult to determine how many rate cuts would be needed and how fast they would need to be implemented. He pointed out that there are upside risks to inflation, downside risks to employment, and financial conditions pose the biggest potential challenge to monetary policy. Fed official Musalem said that inflation is expected to trend toward the 2% target in the medium term. He believes that monetary policy is "in a good place," and the Fed can "carefully and patiently" assess upcoming data to decide whether to lower rates further. Further rate cuts would be appropriate if inflation continues to decline. Fed official Schmid also said that the magnitude of further rate cuts and the ultimate level of interest rates remain to be seen. He believes that the rate cuts so far are a "recognition" of the strengthening confidence in inflation moving toward the 2% target.

Following the release of the CPI data, Bitcoin broke through the $90,000 mark, hitting the $91,000 integer mark within 5 minutes, briefly reaching $93,491.77, setting a new all-time high. However, after reaching the new high, Bitcoin saw a significant pullback, dipping below the $89,000 level, falling over $4,000 from its peak, before recovering back above $90,000. CompaniesMarketCap data shows that Bitcoin has surpassed silver in the global asset class ranking, moving up to eighth place. Coinglass data shows that over 200,000 accounts across the cryptocurrency industry have been liquidated over the past 24 hours. Coingecko data shows that the global cryptocurrency market cap rose 1.5% on the day, breaking through the $3.1 trillion mark, the first time since 2022.

HashKeyGroup Chief Analyst Jeffrey Ding believes that the "Trump Trade" is now beginning to really deliver on its promise, and with the 25 basis point rate cut on November 25th already in place, Bitcoin has ample time to find a new price platform. He stated that "Bitcoin will become the US reserve asset" will be fulfilled. Once this positive factor is implemented, existing cryptocurrencies in the United States will not be sold into the market, which will greatly reduce the potential downside in market expectations; Bitcoin is becoming the US reserve asset, and there may be government procurement activities. Once this move is implemented, it will open up new upside space for the market. Geoff Kendrick, Global Head of Digital Asset Research at Standard Chartered Bank, said he expects favorable policies to drive the total cryptocurrency market capitalization to around US$10 trillion from the current US$2 trillion by the end of 2026.

Related Reading:

• [Fed Rate Cut Expectations Rise, Market Holds Cautious Optimism on Inflation Outlook](https://www.example.com/article1)

• [Bitcoin Price Hits New High, Crypto Market Sees a New Wave of Heat](https://www.example.com/article2)

• [Trump Trade is Delivering, Bitcoin Could Become US Reserve Asset](https://www.example.com/article3)

Disclaimer:

The above content is for informational purposes only and does not constitute any investment advice. Investing involves risk and readers should exercise caution.