Federal Reserve Decision Looms as Bitcoin and Gold Soar
The US debt scale surpassed $4 trillion in July, and Bitcoin began to rise in value. The US Treasury yield approaching 5% has also become a key variable for market attention. Since July 24, Bitcoin has increased by 22%, gold by 9.4%, indicating that hard assets are strengthening in the current macro environment.
The first stage of cyclical reflation is underway, typically marked by a weakening US dollar and rising commodity prices. Historical data shows that during this period, the annualized return of US stocks is about 29%, gold is around 47%, and Bitcoin reaches 73%.
The key variable for market movements going forward will be whether the Federal Reserve raises interest rates at its policy meeting on September 16. The probability of a rate hike in September remains limited, with current market pricing indicating cumulative rate hikes equivalent to about 3.1 increases of 25 basis points each over the next 24 months.
Federal Reserve Chairman Walsh expressed willingness to raise rates, but the weakening dollar and simultaneous bond sell-off with rising yields point to a reflationary environment. There are internal disagreements within the Federal Reserve regarding policy direction, with some members favoring rate hikes and others preferring to keep rates unchanged.