Benjamin Cowen explains that the upcoming Fed transition and FOMC meeting could mark a turning point. His view is that markets expect rate cuts, but inflation and energy prices may delay them, creating risks ahead.
Key Points
Key Highlights:
- The market is no longer expecting near-term rate cuts, with expectations pushed further into the future
- Rising energy prices and geopolitical tensions are keeping inflation elevated, limiting the Fed’s ability to ease policy
- Bitcoin and stocks can stay strong short term, but similar setups in 2022 eventually led to downturns
- Higher risk assets like altcoins are already weakening relative to Bitcoin, signaling underlying market stress
- Bitcoin often benefits from loose monetary policy, so delayed rate cuts act as a headwind
- Energy markets play a key role, with highs in energy often aligning with lows in Bitcoin
- The labor market is weakening slowly, but not enough yet to force immediate rate cuts
Final Takeaway
Cowen’s view is that rate cuts will likely come, but too late. When they finally happen, it may be in response to a downturn, not to prevent one, which could mean more downside before recovery.
