TechFlow news — On September 19, QCP Capital's latest analysis indicated that the Federal Reserve announced a 50 basis point rate cut last night, with plans for two more cuts this year and four additional cuts in 2025. With Fed Chair Powell remaining vague on the scale and pace of future rate reductions, markets will closely watch upcoming labor data for guidance.
The yield spread between the U.S. 2-year and 10-year Treasury notes—a key recession indicator—had been inverted since July 2022 but has recently steepened to a positive 8 basis points. This shift reflects rising market optimism and a shift toward risk assets. In the options market, implied volatility dropped sharply following the FOMC meeting, with Bitcoin's volatility down 19 percentage points and Ethereum's down 18 percentage points. After the meeting, Bitcoin rebounded from $59,000 to $62,000, while Ethereum traded around $2,400.
QCP Capital believes that given the decline in implied volatility, there is now an opportunity to buy upside exposure. They expect market volatility to rise as the U.S. election approaches—coinciding just after the next FOMC meeting. The lower implied volatility makes options pricing more attractive, while the upcoming U.S. election could serve as a significant catalyst for the crypto market.
