#美联储重启降息步伐 Yesterday, both $BTC and $ETH plunged, leaving many people confused: Isn’t the expectation of interest rate cuts heating up? Why did prices fall instead?

At the end of the day, it’s still a liquidity issue. Looking at global markets, you can spot some early signs—although expectations for rate cuts are rising, it seems the market has already mostly priced in this positive news. In the financial markets, aside from focusing on the potential rate cut in December, more attention is actually shifting toward the possibility of a rate hike for the Japanese yen.

The bond market illustrates this issue well. The 1-year short-term bond yield has risen instead of falling. Logically, if rate cut expectations are strong, short-term bond yields should continue to drop (since short-term bonds are most sensitive to rates), but now they’re climbing, suggesting the December rate cut may have already been fully priced in. Even more striking is that 10-year and 30-year long-term bond yields are clearly rising—if people truly believed in continued rate cuts ahead, investors would be snapping up US Treasuries, not selling them off.

So what’s driving up long-term bond yields? Two reasons. Tonight’s PCE data shows that while inflation didn’t rise further in September, its stickiness remains, raising concerns about a possible rebound in future inflation, which naturally pushes up long-term yields. More importantly, expectations of a rate hike for the yen are causing US Treasuries to be sold off—capital is starting to flow back into yen-denominated assets. With US rate cuts and potential yen hikes, the interest rate differential is narrowing rapidly, accelerating the unwinding of carry trades, resulting in yields for both US and Japanese long-term bonds surging. Japanese bond yields are also rising quickly.

Looking at US stocks, while the three major indices are up and the VIX fear index has dropped to around 15 (which on the surface looks optimistic), the Russell 2000 small-cap index is still falling. This indicates that short-term risk appetite isn’t as optimistic as it seems.

To sum up: The dominant factor in financial markets is gradually shifting from US rate cut expectations to Japanese yen rate hike expectations, with capital liquidity moving accordingly. $BTC can’t escape this logic either. Next week during Asian trading hours, pay attention to whether there will be another round of institutional sell-offs, just like the sudden dump on Monday this week.