Bitget Research Institute: The fall in U.S. inflation will help the Federal Reserve end tightening, and risk assets will benefit

On November 17th, the October US CPI was lower than market expectations. Specifically, the CPI was 0% on a month-over-month basis, lower than the market expectation of 0.1%; the core CPI was 0.2% on a month-over-month basis, lower than the market expectation of 0.3%; the CPI rose 3.2% on a year-over-year basis, lower than the market expectation of 3.3%; and the core CPI rose 4.0% on a year-over-year basis, lower than the market expectation of 4.1%.

With the decline in CPI data and the US economy beginning to weaken, the market expects the Fed's monetary policy to shift towards ending the tight monetary policy ahead of schedule. According to CME data, the probability of predicting a 25 basis point rate hike by the Fed in December has dropped to 0.2%. By December next year, the market expects the federal funds rate to fall to the range of 4.25%-4.5%. It is expected that the Fed will cut interest rates by 100 basis points by December next year.

The macro monetary policy environment of interest rate cuts means that more funds will appear in the future market, which is a significant benefit for risk assets. It is expected that the supply of stablecoins in the cryptocurrency market will break through the previous high in the future.