An interesting piece of news has come from this side of Wall Street - Goldman Sachs' latest report shows that the market's betting probability for the Fed to cut interest rates by 25 basis points in December has surged to over 85%. To be honest, this number speaks volumes.

Recently, several sets of data are indeed noteworthy: the unemployment rate has climbed to 4.4%, the highest point since October 2021. Looking at more details, the unemployment rate for young people aged 20 to 24 who have just graduated has reached 8.5%, and the frequency of mentions of layoffs in corporate earnings calls is also clearly increasing. The pressure on the labor market is visible to the naked eye.

More crucial signals come from within the Fed. John Williams of the New York Fed recently stated, "There is indeed room for policy adjustments," and Mary Daly from San Francisco also warned, "The labor market is already weak enough." Both of them hold significant weight within the Fed system, and their statements essentially serve as a precautionary message to the market.

According to the timeline provided by Goldman Sachs: the first move may occur in December, with further actions expected in March and June of next year, and by 2026, interest rates are projected to drop to a range of 3% to 3.25%. If this path is indeed followed, it would mean the end of the tightening cycle that began in 2022, and market liquidity will gradually improve.

For the cryptocurrency market, such changes in the macro environment have always been important variables. Whenever traditional funds start to seek new allocation directions due to falling interest rates, digital assets often become one of the alternatives. Of course, how this unfolds will depend on subsequent data and the implementation of policies, but at least the turning signal in terms of direction has become relatively clear.

What do you think about this potential interest rate cut cycle? Will it affect your asset allocation strategy?