Investment Education

According to Odaily, former Federal Reserve economist and chief economist at New Century Advisors, Claudia Sahm, expressed her views in an interview last Friday. She stated, 'Since the last Federal Reserve meeting, we have had two months of good inflation data, which is what the Fed has been asking for.' However, the current issue is the extent of action the Fed should take. Financial markets, often seen as a guide for central bank direction, have not been helpful in this regard. According to the CME Group's FedWatch tool, the futures market focused on a 25 basis point rate cut for most of last week, but by Friday, traders shifted to an almost equal likelihood of either a 25 or 50 basis point cut.Sahm is among those who believe the Fed should take more significant action. She commented, 'The inflation data alone is enough for us to cut 25 basis points next week, and there will be a series of rate cuts after that.' She noted that the federal funds rate has been above 5% for over a year to combat inflation. 'This battle has been won, and they need to start cutting rates,' she said. This implies an initial 50 basis point cut to prevent a potential labor market recession. She added, 'Since last July, the labor market has weakened, so part of this is recalibration. We have more information now. Fed officials need to make this 50 basis point cut and be ready to take further action.'

According to PANews, interest rate derivatives traders now anticipate that the benchmark interest rate will drop to approximately 2.75% by the end of next year, down from the current rate of around 5.25%. This projection implies ten rate cuts, each by 25 basis points. The Federal Reserve is likely to implement such measures only in the event of an economic recession. While few on Wall Street foresee an imminent recession, most agree that the risk of an economic downturn is higher now compared to several months ago.

According to Odaily, Moody's Analytics has released a report indicating that the Bank of Japan is expected to maintain its current monetary policy during the meetings scheduled for September 19 and 20. Despite the Bank of Japan's faster-than-expected policy tightening and hints at potential further rate hikes, Moody's anticipates the next rate increase will not occur until October.The report highlights the challenges faced by the Japanese economy, citing weak consumer spending and sluggish exports as significant hurdles. Moody's notes that the economy is struggling to recover, partly due to the government's reduction in assistance for household energy bills before introducing new support measures. This reduction is expected to lead to a sharp rise in short-term inflation. Moody's forecasts that the core inflation rate will accelerate from 2.7% in July to 2.9% in August.

According to Odaily, the Madras High Court in India has ruled that police cannot freeze entire bank accounts during fraud investigations, but only the amounts directly related to the fraudulent activity. This decision follows a case where accounts were frozen due to a cryptocurrency investigation. Judge G. Jayachandran emphasized that freezing entire accounts deprives individuals of their livelihood and financial stability. He noted that account holders are often unaware of the reasons behind the freezing of their accounts, leading to significant disruptions in their daily financial and business transactions by the time they discover the issue.Judge Jayachandran also highlighted that, although the law requires investigative agencies to notify account holders and the court when freezing accounts, this requirement is frequently overlooked. He referenced Section 102 of the Criminal Procedure Code, now replaced by Section 106 of the Bharatiya Nagarik Suraksha Sahita Act, which mandates timely reporting of such actions.

According to BlockBeats, on September 16, ahead of the Federal Reserve's interest rate decision, the United States retail sales data, often referred to as 'terror data,' will be released. UBS has indicated that they are closely monitoring retail sales and industrial production data. Weakness in these figures could prompt the Federal Reserve to lower the federal funds rate by 50 basis points instead of 25 basis points.UBS stated that U.S. inflation has slowed to a level that justifies a rate cut. The institution outlined their 'base expectation,' which includes a total rate cut of 100 basis points by the Federal Reserve for the remainder of this year, followed by an additional 100 basis points cut in 2025. UBS added that as the pace of rate cuts accelerates, the U.S. dollar is expected to decline further, while gold prices are anticipated to rise.

According to PANews, CME's 'FedWatch' tool indicates a 48% probability of a 25 basis point rate cut by the Federal Reserve in September, while the likelihood of a 50 basis point cut stands at 52%. By November, the chances of a cumulative 50 basis point cut are 30.2%, a 75 basis point cut is 50.5%, and a 100 basis point cut is 19.3%.

According to PANews, earlier this week, the U.S. Consumer Price Index (CPI) report led the market to believe that the Federal Reserve would slightly cut interest rates by 25 basis points this month. However, the situation took a sharp turn on Thursday. Former New York Federal Reserve President Dudley suggested that the Fed has reasons to cut rates by 50 basis points next week. Reports from the Wall Street Journal and the Financial Times also indicated that the Fed is facing a tough decision between a 50 basis point cut and a 25 basis point cut. Consequently, market bets on a significant rate cut next week have risen to a 50-50 probability. Next week will see several key events:On Monday at 20:30 UTC+8, the U.S. September New York Federal Reserve Manufacturing Index will be released. On Tuesday at 20:30 UTC+8, the U.S. August Retail Sales Monthly Rate will be announced. On Wednesday at 14:00 UTC+8, the U.K. August CPI Monthly Rate and the U.K. August Retail Price Index Monthly Rate will be published. On Thursday at 2:00 UTC+8, the Federal Reserve will announce its interest rate decision and economic projections. Following that, at 2:30 UTC+8, Federal Reserve Chairman Powell will hold a monetary policy press conference. Later on Thursday at 20:30 UTC+8, the U.S. Initial Jobless Claims for the week ending September 14 and the U.S. September Philadelphia Federal Reserve Manufacturing Index will be released. On Friday at 11:00 UTC+8, the Bank of Japan will announce its interest rate decision, and at 14:30 UTC+8, Bank of Japan Governor Kazuo Ueda will hold a monetary policy press conference.

According to Cointelegraph: Prominent pro-crypto attorney and U.S. Senate candidate John Deaton has accused the Securities and Exchange Commission (SEC) of excessive intervention in the cryptocurrency industry, leading to retail investors losing over $15 billion. Deaton emphasized that he intends to hold the SEC accountable for its regulatory actions, especially since he believes Senator Elizabeth Warren “won’t do it.”This statement comes just weeks after Deaton, a vocal advocate for XRP, secured the Republican nomination for the U.S. Senate in Massachusetts. He is set to face off against Democratic Senator Elizabeth Warren in the upcoming November election.SEC's Changing Stance on CryptocurrenciesIn a surprising development, the SEC appears to be softening its stance on cryptocurrencies. A recent court filing indicated that the SEC no longer considers tokens themselves as securities. This shift came to light in an amended complaint against Binance, with the SEC expressing regret for the "confusion" caused by its previous statements regarding tokens being securities.The move is seen as a major turnaround, particularly in light of the SEC's earlier position on XRP, which it had classified as a security. Deaton highlighted this irony, stating, "All I asked was for the SEC to honor the law and make clear that the token itself (XRP) was NOT the security."Ongoing Criticism of the SECThe SEC continues to face backlash for its regulatory approach to the cryptocurrency industry. Just recently, the commission settled with eToro, forcing the platform to halt trading for nearly all crypto assets in the U.S. and imposing a $1.5 million fine.Deaton strongly criticized the SEC's actions, accusing the agency of "gross overreach" that has cost investors billions. In a post on X (formerly Twitter), Deaton said, “The SEC’s misconduct and gross overreach caused small investors over $15 billion. On behalf of those 75K small investors I represented, we do not accept the SEC’s apology.”

According to Odaily, SBF has officially appealed his fraud conviction. In a 102-page appeal submitted on Friday afternoon, SBF's lawyers requested the U.S. Court of Appeals for the Second Circuit to overturn the original conviction and appoint a new judge for a retrial, citing unfair bias from the presiding judge. Last November, a New York jury found SBF guilty of seven counts of fraud and conspiracy related to the collapse of his cryptocurrency trading platform in November 2022. In March of this year, Judge Lewis Kaplan of the Southern District of New York (SDNY) sentenced SBF to 25 years in prison. SBF has currently served six months of his sentence.

According to BlockBeats, the number of initial jobless claims in the United States for the week ending September 7 reached 230,000. This figure aligns with the expected number of 230,000 claims. The previous week's number was revised from 227,000 to 228,000.