Global financial market Focus: How to Respond to policy and industry Changes with the Fed's decisions and cryptocurrency ipos?

Recently, the global financial market's attention will be focused on Jackson Hole, Wyoming, where the annual meeting of global central bank governors is held. The speech of Federal Reserve Chair Powell has become the core of market attention. In the past, this meeting was often used by the Federal Reserve as a platform to signal major policy shifts. However, Powell's remarks this time may have a profound impact on the global financial landscape in the coming months and even longer.

Judging from the recent performance of the three major US stock indices, the market as a whole has shown a delicate balance, with mixed gains but all recording two consecutive weekly gains. The Dow Jones Industrial Average and the S&P 500 Index even reached record highs during the trading session. This reflects the market's cautious optimism while waiting for policy signals from the Federal Reserve. However, behind this optimism lies uncertainty about the future policy path.

At present, the market almost unanimously expects that the Federal Reserve will start its interest rate cut cycle in September, but Morgan Stanley's warning has poured cold water on this expectation. Morgan Stanley pointed out that Powell will not completely close the door to interest rate cuts in September, but his core task lies in breaking the market's "interest rate cut is inevitable" theory and regaining the policy initiative. This means that even if a rate cut becomes possible, the Federal Reserve will flexibly adjust its policy based on subsequent economic data rather than blindly following market expectations.

The uncertainty of such policies will undoubtedly increase market volatility. Investors need to be prepared for the possible market shock brought about by the "expectation gap". On the one hand, if Powell's speech fails to send a clear signal of a rate cut as the market expects, or if he is cautious about the extent of the rate cut, then the market may undergo a correction. On the other hand, even if a rate cut becomes a reality, the internal differences within the Federal Reserve regarding the subsequent monetary policy path may further intensify market volatility.

From a financial perspective, the policy decisions of the Federal Reserve have a crucial impact on the global financial market. Although interest rate cuts may boost market sentiment in the short term, in the long run, if the reduction is too large or too rapid, it may lead to risks such as inflation rebound and asset bubbles. Therefore, when making policy adjustments, the Federal Reserve needs to weigh the pros and cons and act with caution.

In the cryptocurrency field, the submission of the public prospectus of Gemini Exchange has also drawn market attention. As the third cryptocurrency exchange planning to list on the US stock market after Coinbase and Bullish, the listing of Gemini will undoubtedly bring new capital inflows and market attention to the cryptocurrency industry. However, from the perspective of financial data, although Gemini's revenue in 2024 reached 142.2 million US dollars, its net loss was as high as 158.5 million US dollars, which reflects that the cryptocurrency industry still faces significant challenges in terms of profitability.

The recent repeated speculation of ipos of cryptocurrency-related companies in the US stock market also reflects the excessive optimism of the market towards the cryptocurrency industry. Although this sentiment may push up stock prices in the short term, in the long run, if the cryptocurrency industry fails to achieve sustainable profit growth, such speculation may eventually end with a bubble burst.

To sum up, this week the global financial market will witness a significant period of policy signal release. The policy decisions of the Federal Reserve and the IPO dynamics of the cryptocurrency industry will all have a profound impact on the market. Investors need to maintain a cautiously optimistic attitude, closely monitor market dynamics and policy changes, and deal with possible market fluctuations and risks. At the same time, from a financial perspective, the market also needs to view the policy adjustments of the Federal Reserve and the development prospects of the cryptocurrency industry more rationally, avoiding blind following and excessive speculation.