Benjamin Cowen breaks down why the Fed likely holds rates steady at tomorrow's meeting but ends up hiking later this year anyway.
Key Points
Key Highlights:
- The 30 year yield keeps testing 5.2% and putting in higher lows, suggesting the bond market wants rates higher even if the Fed doesn't move tomorrow
- Initial jobless claims just hit their lowest level in decades while unemployment keeps trending down, meaning the labor market gives the Fed zero reason to cut, and inflation risk is the real concern
- The Fed has never started a hiking or cutting cycle in the summer in recent history, both 2024 and 2025 cuts began in September, so a September hike fits the pattern better than tomorrow
- If the Fed holds now, the bond market likely pushes yields higher, forcing a hike later this year, which lines up with the stock market corrections that started in August or September in 2014, 2018, and 2022
- Bitcoin dominance excluding stablecoins keeps climbing even though total dominance looks flat, because stablecoin dominance has doubled since October, explaining why altcoins keep bleeding while Bitcoin holds up
Takeaway No hike tomorrow, but September is in play. That sets up the same seasonal pattern as prior midterm years, a stock correction later this year that could finally push Bitcoin into its real market cycle bottom.
