Over the next two days the fed is going to come out and say if they are going to cut interest rates or not. This has been on the mind of many and some speculate that the lower markets are the result of such speculation and unknown about if the fed will cut rates.

For myself I personally believe that the rate should not be cut yet until we are under that 2% inflation rate because there's a lot of back tracking we need to do to make up for the massive inflation we have had.

Some speculate a small cut of 25 points while others are now saying a larger rate cut of 50 points which is half a percent.

This rate cut should effect mortgage rates but it's never a for sure as banks can set the rate they want. However, this could if done for the rest of the year open up the housing market again to some more buying and selling of these assets as most people are locked in at 3% and some times lower. It makes no sense for someone to sell their house and take on a double higher mortgage rate.

Stocks

So what happens to stocks when rate cuts start coming in if we look at the historic numbers of the past?

It's noted that stocks normally do well after a interest rate cut. It should mean more jobs, less inflation and overall more spendable or credit money to go around.

However every cycle is unique and this one is very unique as it's still the aftermath of the lockdowns of covid which legit killed the economies around the world and really shook things up for businesses.

It could swing either way depending on many factors and what we do know is that the overall markets don't like not knowing and normally sell off or go into this sideways trading like we have been seeing for the last few days.

Crypto

It begs the question then how will crypto markets react to such news. So far it's been bouncing wildly as well.

For just the last month the markets are down but have wildly jumped from 52k levels to 60k levels in just weeks! I suspect we will most likely see a decline again into the 55k level at least until news breaks about fed rate cuts. But will it do anything to the price after that?

A stronger dollar for instance means other asset values would go down. So far we have been seeing gold and silver hit some crazy highs and is most likely the reason people also piled into bitcoin as a way to hedge against inflation and well honestly they would have been rather well off even if they bought at the 30k levels.

What normally happens however is that "risky" assets like crypto is still considered often get sold off and more non risky investments start to pay out a higher return and crazy high percent's are no longer needed to try and curb inflation and rates causing it to sit around $70 a barrel far lower then it's highs of over $100 a barrel for a long time.

So how will it effect the crypto space?

It's anyone's guess but history has shown us in some cases a sell off while others are a rally.

This also means that other commodities will most likely fall as well gold, silver maybe not so much but things like oil are currently being propped up by high inflation.

Posted Using InLeo Alpha