QCP Capital: With the Fed about to start cutting interest rates, any decline in the stock market and cryptocurrencies will be short-lived

BlockBeats news, on August 28, QCP Capital's latest report pointed out that "at the Jackson Hole conference, Powell's position was significantly dovish. He said that "the time has come" and interest rates need to be lowered to avoid excessive cooling of the job market. Last week's revised employment data (a decrease of 800,000 people) increased this risk. We believe that the Fed's reaction function is now more inclined to prevent the collapse of the job market, so the threshold for a 50 basis point rate cut in September is greatly reduced.

Although there are only three meetings left, the market currently expects four rate cuts in 2024. The US stock market has been resilient and is close to its historical highs. However, we remain cautious and believe that the US stock market may peak again, especially considering the decline in trading volume and NVDA's earnings report today. NVDA's options are expected to rise by 10% tonight.

We believe that any decline in the stock market (and cryptocurrency) will be short-lived. As Powell and the Federal Reserve prepare to start a rate cut cycle, increased liquidity will eventually drive risk assets up. We are on the brink of a rate-cutting cycle."