This week's macroeconomic and economic focus - analysis of the possibility of early decline Early in the morning, I saw a decline in US stock futures, and almost at the same time as the futures opened, BTC also followed suit. I flipped through the market information and did not find any strong bearish sentiment. The S&P 500 and Nasdaq futures fell more than 0.7% in the morning and are now gradually recovering. That is, Trump announced in the morning that he would impose a 100% tariff on films imported from the United States. This matter itself has little impact on the US economy. After checking the data, the proportion of foreign films in the US box office is usually only within 10%, and the film and television industry accounts for less than 1.5% of the US GDP. The impact of imported films is still more on platforms such as Netflix and Amazon Prime. Moreover, the current driving force of the US stock market is mainly in the technology and AI sectors, so the possibility of a decline due to film and television tariffs is unlikely. Therefore, my personal guess is that it is mainly caused by two reasons. This week, auctions for 3-year, 10-year, and 30-year US Treasury bonds will begin. The total amount is 125 billion US dollars, and in the current high interest rate environment, there is a high probability that liquidity will be extracted from the market. Of course, I don't think this is a big negative, after all, selling bonds has long been expected by the market. However, although selling bonds itself is not a big negative, whether buying bonds goes smoothly will have an impact on the market. In short, if the demand is strong this time, the interest rate is moderate, and the short-term fluctuation of the market is limited, but if the demand is insufficient or the bid winning interest rate soars, it shows that the market lacks confidence in the sustainability of American debt or the future interest rate environment. To put it simply, if the winning interest rate in US bond auctions skyrockets or demand is insufficient, it may trigger a sharp decline in the bond market, compression of US stock valuations, pressure on the cryptocurrency market, increased volatility of the US dollar, and even systemic liquidity concerns, triggering expectations of Federal Reserve intervention. This is a typical risk window of 'sudden loss of control of long-term interest rates'. Simply put, the stock market is declining. Of course, this means that in the case of unfavorable auction, the overall performance of the recent US treasury bond bond auction is stable, especially the 10-year treasury bond (auction in April) shows strong market demand. The decrease in foreign investor participation in short-term bonds may indicate market concerns about the short-term economic outlook. 2. This Thursday morning's Federal Reserve interest rate meeting. There should be no doubt that interest rates will not be adjusted in May, but the key is whether there is a possibility of adjustment in June and July. According to data provided by CME, the expectation of no interest rate cut in June has risen to 66.8%. After GDP and non farm payroll data, the market is no longer predicting that the Federal Reserve will cut interest rates in June. This has already been anticipated by the market, so not cutting interest rates is not necessarily bad in itself, and what Powell will say at the interest rate meeting is what investors are nervous about. In the morning, I read an interview with former Federal Reserve official and current Goldman Sachs Chairman Kaplan in the Wall Street Journal, titled 'Talking about the Difficulty of Cutting Interest Rates', so I think everyone knows what it is about. In the interview, Kaplan even quoted Powell's warning in 2022 that "in order to lower the inflation rate to 2%, we may have to accept an economic recession." He believed that the main reason why the United States has not yet entered an economic recession is that government fiscal spending has been at a historical high, with fiscal deficits accounting for over 6.5% of GDP. But currently, the United States is reversing this situation and reducing fiscal spending. So Kaplan believes that the probability of economic risks occurring in the United States is quite high, and he supports only two interest rate cuts in 2025 if he is still at the Federal Reserve. He also believes that the Federal Reserve will take more reactive measures rather than preemptive strikes. To put it simply, the Federal Reserve will still primarily rely on data analysis and will only intervene in the market when there is a clear possibility of an economic downturn (recession). We need to focus on Powell's statement on tariff inflation in his speech. If he explicitly considers the inflation driven by tariffs as' temporary ', it may alleviate market concerns about hawkish policies. So overall, although there is a lack of clear negative data this week, the environment of unstable long-term interest rates and the Federal Reserve's continued dependence on data determines that the market will continue to be driven by macro events, and emotions will be affected by information. If the positive news decreases, FOMO will gradually cool down. Risk assets such as BTC and technology stocks lack clear upward momentum, and unless there is an unexpected dovish shift by the Federal Reserve or oversubscription in US bond auctions, they are likely to enter a period of volatile consolidation at support levels of $93000 to $98000. This tweet is sponsored by @ ApeXProtocolCN | Dex With Apex