On September 8, UBS reversed its "hold rate for the whole year" policy, saying it would raise 25bp each in September and December. On September 11, Goldman Sachs changed its policy from "hold stead" to "raise rates by 25bp in September." On the same day, TD Securities directly reversed its stance to "raise rates three times starting in September, with the last two in October and January next year." Citigroup expects to raise rates in September and maintain it until June 2027. JPMorgan Chase changed its plan to raise rates by 25bp in September and December.
On the same day. Six investment banks. All switched.
But what was it like half a year ago?
In February this year, TD Securities expected three rate cuts within the year. In June, Walsh made his debut, with the dot plot revised up to 3.8%, and nearly half of officials shifted to rate hike expectations. Then the August CPI came out, with core growth up 0.3% month-on-month, exceeding the expected 0.2%, and the probability of a rate hike jumped from 69.4% to 90%.
90%。 For the first time in three years.
The last time the Fed raised interest rates was in July 2023. Rates have remained at 5.25%–5.50%. Now, from 3.50%–3.75%, and further up.
Why is Wall Street collectively tearing up the report?
Wash flipped the burden of proof. Jackson Hole's original words in his speech were, "If inflation hasn't reached the target, there's still work to be done." In the past, it was about proving that rate hikes were reasonable; now, it's about proving that pauses are justified.
And Nick Timiraos of the "New Federal Reserve News Agency" pointed out an even more striking statistic: since the 1990s, the only precedent for the Fed to "raise rates once and then stop" was in 1997.
Former Federal Reserve Vice Chair Clarida bluntly said: If rates are raised next week, there is a high probability of another one.
To put it simply: this isn't something that can be done with just one hike. The market is pricing in not just a rate hike, but a cycle.
But the truly strange thing happened in the crypto market.
After the CPI data was released, Bitcoin bucked the trend and rose 1.5%, returning to $78,600. Within 24 hours, it rose 1.5%, demonstrating strong resilience. Matt Mena, a strategist at 21Shares research, provided some data: during the 30 days when core CPI exceeded expectations, Bitcoin's average increase was 2.13%.
ETF liquidity is being torn apart. From September 8 to 10, spot ETFs saw outflows for three consecutive days, totaling $449 million. But in the same week, Bloomberg ETF analyst Eric Balchunas observed a single-day inflow of about $500 million, "like hitting a home run at a low point in a game."
Institutions are dumping and bottom-fishing. Same week.
The Fear and Greed Index dropped from 74 to 56, with severe long liquidations. But Bitcoin didn't crash. It hovered between 76,000 and 78,500, waiting for the FOMC to hold on.
How should we understand this divergence?
LMAX strategist Joel Kruger made a key point: traders were inclined to raise rates even before the CPI release, and most of the hawkish risk was already reflected in prices. Mark Connors, Chief Investment Officer at Risk Dimensions, made an even harsher blow: Bitcoin and gold rose in tandem, showing that the market is questioning not interest rates, but policy credibility. "We can't print oil, and Bitcoin can't be devalued."
Negative news from rate hikes? That was the script for 2022. Right now, what the market fears is not the rate hikes themselves, but government debt and runaway inflation.
The most important difference is something most people overlook.
The 2022 rate hike started at zero interest rates. This time, the starting point was 3.50%–3.75%.
Raising from zero to 5% is called tightening. Raising from 3.75%—that's another twist in an already tight environment, fully opening up the imagination for terminal interest rates.
If the three rate hikes predicted by TD Securities materialize, it would mean liquidity tightening three times in a row over the next four months. September, October, and January next year. Each time is a direct drain on liquidity in the crypto market.
Are you ready to get slapped for three months straight?
👉 Half a year ago, Wall Street was discussing how many times it would drop; six months later, they were discussing adding it several times.
👉 Has your position kept up with this change?
👉 An 82% chance of a rate hike is not news. The news is: no one knows when the second rate hike will come.
$BTC$ETH$XAU #美国CPI环比加速, expectations for interest rate hikes are heating up
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