This wave of "rate cut expectations" might be a trap

I just saw some news: a former Fed vice chair publicly voiced support for the so-called "hawkish rate cut." The market instantly went wild, with all kinds of voices calling for the return of a bull market. But the more I look at it, the more something feels off.

Here’s the conclusion: Even if there is a cut this time, it’ll be a "rate cut with handcuffs on."

What exactly did she say? "Cut one more time, then pause, and stick to the 2% inflation target for the next two years." In plain English: we're not really going to flood the market with liquidity, we’re just afraid the economy will crash too quickly, so we’ll give you a quick breather. Think you got a reassuring promise? In reality, you got a ticking time bomb that could go off at any moment.

What were rate cuts in the past? Floodgates open, liquidity everywhere. Now? They're feeding you drop by drop with an eyedropper, ready to cut you off at any time. Liquidity is at their discretion—they’ll provide it or withdraw it immediately, and there’s no negotiation.

**Where’s the most dangerous part?**

It’s that everyone is expecting the same thing. When retail investors collectively believe in the formula "rate cuts = weaker dollar = funds flowing into crypto markets," big money is very likely doing the opposite. They’ll use this short-term easing expectation to drive prices up, and when you chase the rally, they’ll suddenly exit. Then the market realizes the hawkish promise is still in place, and the bubble bursts instantly.

This isn’t a conspiracy theory—it’s called expectation management. Using good news to complete the final round of harvesting—a textbook move.

**What to do? Three survival tips:**

**Don’t daydream.** Don’t fantasize about some fairytale of endless easing. Treat this possible rate cut as a technical adjustment, not a bull market engine. Even if prices rise, don’t get too excited—it could just be a bull trap.

**Watch the data closely.** Nonfarm payrolls and CPI—these are the lifelines. If employment data improves or inflation doesn’t come down, the Fed will flip faster than a book. Data is their pivot switch, so be prepared in advance.

**Control your positions.** In this kind of chaotic period, building positions in batches is a hundred times better than going all-in at once. Holding cash isn’t about missing opportunities—it’s about waiting for a more certain moment to strike.

The market isn’t short of opportunities; what’s lacking are people who survive until the opportunity arrives.