Recently, an analysis was conducted on Wall Street institutions' predictions regarding the Federal Reserve's (FED) interest rate cut timetable, revealing that market divergences are widening, forming three distinct camps.
The first camp consists of institutions that insist "there will be no interest rate cuts this year," mainly represented by Morgan Stanley and Bank of America. These financial giants are closely linked to the traditional credit system, from which they derive core profits through the debt spread structure and demand for short-term bonds. Maintaining the current interest rate level is beneficial for them to continue engaging in carry trades and regulatory arbitrage operations.
The second camp consists of moderate doves predicting that "there will be a rate cut in December," including Goldman Sachs, Deutsche Bank, and Nomura Securities. These institutions adopt a strategically balanced position, betting on an economic soft landing and policy equilibrium. They cannot completely ignore the downward trend in inflation and the pressure for rate cuts from the political level, nor do they dare to bet too early on liquidity easing, fearing disconnection from the market or being contradicted by subsequent economic data.
The third camp is a more radical group of rate-cutting advocates, such as UBS and Wells Fargo, who expect "four rate cuts starting in September." Unlike the soft landing theory, the core view of this group is that "if rates are not cut, there will be a collapse." They believe that factors such as the surge in U.S. Treasury supply, the ongoing expansion of the fiscal deficit, increasing geopolitical tensions, and concentrated refinancing pressures on corporate debt will force The Federal Reserve (FED) to take action. The current wait-and-see attitude of the FED is merely a temporary risk-hedging measure; the crisis will eventually erupt.
As the Federal Reserve (FED) remains inactive and adopts a passive response stance, interest rate divergences are spiraling out of control, and the market has entered a phase of various parties betting and competing against each other. With political pressure constantly increasing, it seems that the Fed's forced interest rate cuts are just a matter of time.
In this case, it is advisable for investors to reassess their positions and consider whether the current asset allocation logic is still sound. There is a fundamental rule in the market: when the system anchor begins to shake, the market instinctively seeks new pricing references and consensus on value storage.
Real large-scale market trends often do not appear when all predictions are correct, but rather at the moment when all predictions begin to collectively fail. Bitcoin, as a special asset class, may become one of the biggest beneficiaries in this uncertain environment.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
Recently, an analysis was conducted on Wall Street institutions' predictions regarding the Federal Reserve's (FED) interest rate cut timetable, revealing that market divergences are widening, forming three distinct camps.
The first camp consists of institutions that insist "there will be no interest rate cuts this year," mainly represented by Morgan Stanley and Bank of America. These financial giants are closely linked to the traditional credit system, from which they derive core profits through the debt spread structure and demand for short-term bonds. Maintaining the current interest rate level is beneficial for them to continue engaging in carry trades and regulatory arbitrage operations.
The second camp consists of moderate doves predicting that "there will be a rate cut in December," including Goldman Sachs, Deutsche Bank, and Nomura Securities. These institutions adopt a strategically balanced position, betting on an economic soft landing and policy equilibrium. They cannot completely ignore the downward trend in inflation and the pressure for rate cuts from the political level, nor do they dare to bet too early on liquidity easing, fearing disconnection from the market or being contradicted by subsequent economic data.
The third camp is a more radical group of rate-cutting advocates, such as UBS and Wells Fargo, who expect "four rate cuts starting in September." Unlike the soft landing theory, the core view of this group is that "if rates are not cut, there will be a collapse." They believe that factors such as the surge in U.S. Treasury supply, the ongoing expansion of the fiscal deficit, increasing geopolitical tensions, and concentrated refinancing pressures on corporate debt will force The Federal Reserve (FED) to take action. The current wait-and-see attitude of the FED is merely a temporary risk-hedging measure; the crisis will eventually erupt.
As the Federal Reserve (FED) remains inactive and adopts a passive response stance, interest rate divergences are spiraling out of control, and the market has entered a phase of various parties betting and competing against each other. With political pressure constantly increasing, it seems that the Fed's forced interest rate cuts are just a matter of time.
In this case, it is advisable for investors to reassess their positions and consider whether the current asset allocation logic is still sound. There is a fundamental rule in the market: when the system anchor begins to shake, the market instinctively seeks new pricing references and consensus on value storage.
Real large-scale market trends often do not appear when all predictions are correct, but rather at the moment when all predictions begin to collectively fail. Bitcoin, as a special asset class, may become one of the biggest beneficiaries in this uncertain environment.