Recently, the crypto assets market has been abuzz with excitement over the Fed possibly lowering interest rates in September, but this optimism may be premature. Let’s delve into the reality behind these expectations:

First, Fed Chairman Powell has maintained a tough stance. Despite attempts by some to influence decisions, he still insists that combating inflation is the top priority. The possibility of interest rate cuts is very low before inflation shows a clear decline.

Secondly, the threat of inflation has not been completely eliminated. Although overall inflation indicators have eased, core inflation remains high. In this situation, hasty interest rate cuts may trigger more severe inflation problems, forcing more aggressive interest rate hikes in the future.

Thirdly, the US economy is currently performing well, with a strong job market and continuous wage growth. In this economic environment, the Fed does not need to stimulate the economy by lowering interest rates, and it is also unlikely to release a large amount of liquidity to support the asset market.

Moreover, the market may have formed a bubble. Investors who are overly betting on interest rate cuts are driving up asset prices, and once expectations fall short, it could trigger a serious market correction. Investors who blindly follow this optimistic sentiment may face significant losses.

Finally, the global economic situation remains complex. Against the backdrop of slow economic recovery around the world and tense geopolitical situations, the Fed is unlikely to take the risk of loosening monetary policy. If investors focus solely on domestic factors in the United States and ignore global risks, they may suffer losses amid market fluctuations.

Overall, the expectation of a rate cut in September is likely just an illusory celebration. Wise investors should remain calm and wait for actual economic indicators and policy signals, rather than being swayed by short-term market sentiment. During this period of uncertainty, staying vigilant and patient may be the best strategy.