Is the Federal Reserve's rate cut window opening? The truth behind the inflation data

Question

【Crypto World】There has been an interesting economic debate recently. U.S. high-level officials, when assessing inflation, used an unconventional method—the three-month moving average—rather than the market’s usual year-over-year data.

From this perspective, the current inflation rate is about 1.6%, which is actually below the Federal Reserve’s 2% target. What does this mean? It indicates that the Fed has more room to cut interest rates.

You see, this is an interesting signal. If the official stance leans toward optimistic expectations of rate cuts, then the liquidity environment might be more relaxed than the market anticipates. The crypto market is particularly sensitive to liquidity—rate cut cycles are often accompanied by ample funds, making risk assets more likely to be sought after.

Of course, this differs from public opinion and mainstream economists’ views. However, policymakers’ attitudes are often more important than public consensus. This detail is worth paying attention to for crypto investors, especially traders betting on a rebound in risk assets.

In simple terms, rising expectations of rate cuts could be a key variable for asset allocation in the coming period.

MetaReckt · Accepted Answer

Hmm, the March line move does have some substance. The Federal Reserve is paving the way for interest rate cuts.

To put it simply, when liquidity loosens, the crypto market gets excited. This wave is probably coming.

The authorities can do whatever they want, as long as we follow and enjoy the gains.

If the rate cut really happens, this round of risk assets will rebound steadily. Going all in and waiting for takeoff.

Economists keep talking nonsense all day, but a single statement from policymakers is more effective. Understand?

GamefiHarvester · Answer

Wait, a three-month moving average? Isn't that just a change of concept? Why not use year-over-year comparison?

A rate cut is indeed a positive signal, but this kind of rhetoric sounds a bit superficial.

It's the old routine of official statements versus public consensus; crypto enthusiasts just love to believe this.

If there's really a rate cut, it depends on actual actions—who can't just say it?

Liquidity is abundant, but no one knows how long this rebound can last.

LuckyBlindCat · Answer

Playing the data game again, the three-month moving average really can spin a different story.

Really? The expectation of interest rate cuts is so obvious? I feel like it's just an excuse.

Let's wait and see, when liquidity loosens, will the coin price really take off?

I find the official explanation a bit questionable.

If the interest rate cut cycle starts, I might need to adjust my positions.

NewDAOdreamer · Answer

Ha, it's data magic again. A three-month moving average can create room for interest rate cuts? I don't buy it.

Whether the rate cuts are real or fake, we'll see how the Federal Reserve actually acts with real money. Anyone can talk big.

How long can this liquidity last... feels like the same old trick is coming again.