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Asia Colour

Asia Colour

QCP CapitalQCP Capital2024/09/18 14:09
By:Elisha

The Fed meets today and its significance cannot be overstated. Their decision will shape the path of financial markets in the medium to long term.

Market participants are pricing in a 33% chance of 25bps and 66% chance of 50bps cut, based on Fed Fund Futures pricing.

However, economists polled by Bloomberg see a 25bps cut as more likely, with 104 out of 114 predicting this outcome. Only 9 out of 114 economist expect a 50bps cut. This divergence extends all the way out to 2026.

The direction and magnitude of market movements during and post FOMC remain unclear due to multiple layers of uncertainty:

  • Interest rate decision (25bps or 50bps cut)
  • Dot plot projections
  • Powell’s press conference post-FOMC

That said, we are confident that volatility will be high in the days following the meeting, as traders readjust their positions over the next few weeks. The regime change could also signal the start of strong macro trends.

Trade Idea

The start of a rate cutting cycle aimed at normalizing interest rates supports hard assets as stores of value. While drawdowns and high volatility are expected, don’t let that detract you from the path to higher BTC prices. We favor long-dated structures with unlimited upside to capitalize on potential parabolic advances in prices.

Moonshot ERKI
  • Maturity: 27JUN25
  • Return: >290% p.a. if BTC expires above 100k
  • Strike: 100,000
  • ref: 59600

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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