Fed Rate-Hike Fears Are Back: 5 Altcoins to Consider Before September’s Market Shock
- September rate-hike expectations have increased, with markets pricing a materially higher chance of a Fed increase after Warsh’s Jackson Hole comments.
- Treasury buybacks are being expanded, with long-term operations increasing to at least $4 billion per operation from September 9.
- ADA, SUI, DOT, ENA, and APT could face higher volatility if tighter financial conditions reduce demand for riskier crypto assets.
September is shaping up as an important month for financial markets as expectations for another Federal Reserve rate increase have risen sharply. Following Federal Reserve Chair Kevin Warsh’s Jackson Hole speech, market pricing moved toward a higher probability of a September hike. Reuters reported that expectations increased to about 57%, while other market measures placed the probability above 60%.
The transition has added new pressure on risk assets as a result of the increase in interest rates which can drive the reduction in the demand for speculation. Liquidity and borrowing costs are especially important for the cryptocurrency markets. But, the idea that 99% of investors will lose their shirts or markets are always going to crash on Monday has no supporting evidence. The September decision will rely on the data from inflation and employment, and the prognosis is far from certain.
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