HTX DeepThink: Interest rate hike itself has been fully priced, how Warsh expresses its stance is the real directional variable According to TechFlow, on September 16th, Chloe, a columnist for HTX DeepThink and a researcher at HTX Research, analyzed that what really matters before this week's FOMC meeting is not whether to raise interest rates by 25 basis points, but why the market suddenly became so convinced and how it will respond after the Warsh meeting. The rapid increase in the probability of interest rate hikes in the past week mainly comes from three variables: the year-on-year increase in PPI to 5.4% and the month on month increase in CPI to 0.4% in August, which strengthens concerns about further acceleration of inflation; The situation in the Middle East has pushed crude oil above $100, and the energy shock has made the market worry that CPI will continue to be under pressure in the coming months; The lack of significant deterioration in employment means that the Federal Reserve has room to prioritize addressing inflation risks. As of September 15th, CME FedWatch's pricing for a 25 basis point rate hike has risen to about 94.5%, and Polymarket also considers the rate hike as an absolute benchmark scenario, but retains a tail probability of about 12% of "no rate hike". If the Federal Reserve raises interest rates by 25 basis points but the wording is neutral or dovish, such as not explicitly committing to continue raising interest rates in December, as the rate hike itself is highly priced, there may be a trend of "selling expectations and buying facts": a decline in 2-year yields, a weakening of the US dollar, and short covering of US bonds may all drive BTC to rebound, while ETH and high Beta altcoins have greater elasticity. The real bearish scenario is a combination of 25 basis points and clear hawkish forward guidance: if Warsh implies that September is just the beginning of a new cycle of interest rate hikes, the market will continue to raise terminal interest rates, and the 10-year yield will maintain or even exceed 5%, which is the most unfavorable for BTC's liquidity valuation. ETH and altcoins usually bear greater downward Beta. Unexpectedly not raising interest rates is actually the scenario with the highest volatility. The first reaction is likely to be a sharp drop in 2-year yields, a weakening of the US dollar, and a sharp drop in BTC; But if the market subsequently interprets it as' the Federal Reserve still dares not tighten under high inflation ', long-term inflation expectations may rise, and the 10-year yield may continue to rise, BTC may first rise and then fall. Therefore, what is truly worth paying attention to is not the 25 basis points themselves, but how the 2-year and 10-year yields and the US dollar index will be re priced after the interest rate hike. The benchmark framework is: dovish interest rate hikes are most beneficial for Crypto, hawkish interest rate hikes are most unfavorable, and unexpected non rate hikes are most likely to form a severe two-way market. Note: The content of this article is not investment advice and does not constitute an offer, solicitation, or recommendation for any investment product.