With the Federal Reserve (Fed), the US central bank, expecting to cut interest rates, the market’s eyes are on the market. But that’s not all that matters to investors.
“What could affect the market will not be the rate cut itself, but the effects of a possible recession,” stands out renowned trader Daniel Muvdi. The specialist, who serves as head of markets at the Quantfury trading platform, awards This situation is due to the weakness of the labour market in the economic powerhouse.
According to his perspective, as the economic slowdown data becomes more pronounced, The market could begin to discount a recession. Given this scenario, “if the Fed makes excessive decisions today, it could cause panic,” he exclaims. In other words, he sums up that “Powell is taking a gamble today.”
He expects high volatility in the markets, with some expecting a 0.25% cut and others expecting a 0.50% cut, meaning that some will not be happy with the outcome. “I expect some big moves,” said on major stocks and Bitcoin (BTC).
Although a rate cut lowers the cost of borrowing and increases liquidity, creating demand in the markets, it also reflects weakness in the economy. Therefore, although Muvdi does not rule out upward reactions to this monetary policy, he believes it is key to closely monitor upcoming data that may indicate signs of recession or not.
“There is still room for bullish momentum with this cut, as we are not in a recession. But time is running out and a recession, in my opinion, is becoming more and more plausible,” Muvdi said. He added that, due to this situation, he is adjusting his portfolio with defensive and some offensive bets to maintain balance.
Daniel Muvdi is recognized for his market analysis on social media. Source: Muvdi.
Bitcoin analysts turn their attention to upcoming employment data
For analyst Juan Rodriguez, a 0.25% cut can be considered a lukewarm measure and a 0.75% cut a sign of great weakness in the economy. Therefore, does not rule out bearish reactions in the short term in the markets, including bitcoinin such scenarios. Instead, a 0.50% drop could be seen as necessary and bullish, he says.
With this panorama, will be key The employment and economic data that will emerge in the coming weeks will be of great importance to the markets, says Rodríguez, as reported by CriptoNoticias. The reason for this is that they could see signs of a recession or not, which is why a period of expectant operators and high volatility is possible.
Beyond the uncertain environment, Rodriguez projects that in the medium term the increased liquidity due to the cuts will boost the markets. That is, as long as the economy remains strong.
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.