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The minutes of the Federal Reserve's September monetary policy meeting signaled a hawkish stance, with most officials believing that further rate hikes are still needed before the end of the year and focusing on upside inflation risks. Meanwhile, the 30-year U.S. Treasury yield broke above 5.7%, hitting its highest level since 2002. Together, the two pieces of information point to rising global risk-free rates and liquidity pressure, and market attention to risk asset pricing is heating up accordingly. For risk assets such as crypto assets, changes in macro liquidity are becoming an important external variable.
Fed Minutes: Most Officials Believe Further Rate Hikes Are Still Needed Before Year-End
The meeting minutes show that most officials believed further rate hikes were still needed before the end of the year. The minutes also mentioned that inflation risks are skewed to the upside. This policy signal means the market needs to reassess the interest rate path and liquidity environment before the end of the year. Public information shows that this signal will directly affect market liquidity and risk asset pricing. For the crypto market, changes in expectations for Fed monetary policy usually affect risk appetite, funding costs, and valuation levels. Although crypto assets have their own on-chain supply and demand, project progress, and regulatory developments, when macro interest rate expectations change, the overall pricing framework for risk assets is affected. The hawkish signal released by the meeting minutes forces a correction in market expectations for liquidity easing, and risk asset investors are therefore paying more attention to whether the policy rate will remain elevated for longer.
30-Year Treasury Yield Breaks Above 5.7%, Highest Since 2002
The long-end U.S. Treasury market is also sending an important signal. The 30-year U.S. Treasury yield broke above 5.7%, hitting its highest level since 2002. The long-end Treasury yield reaching a more than two-decade high reflects rising global risk-free rates and liquidity pressure, posing an important macro impact on risk assets such as crypto assets. The long-end Treasury yield is generally regarded as one of the important benchmarks for global asset pricing. When this yield rises, returns on risk-free assets increase, and the relative attractiveness, discount rates, and financing costs of risk assets are all reassessed. For crypto assets, this macro impact is not limited to a single coin or a single project, but is transmitted through channels such as liquidity, capital allocation, and risk appetite. Therefore, the 30-year Treasury yield breaking above 5.7% is not only a bond market event, but is also seen as an important macro variable affecting the pricing of risk assets such as crypto assets.
Link Between the Two Pieces of Information: Policy Signal and Long-End Rates Resonate
There is a clear connection between the Fed meeting minutes and the new high in the 30-year Treasury yield. The former reflects monetary policy officials' judgment on the interest rate path and inflation risks before the end of the year, while the latter reflects long-end market pricing of risk-free rates and liquidity pressure. Together, they shape the global risk-free rate and liquidity environment. When the policy signal is hawkish and long-end yields are also at a high level, the market's assessment of liquidity and risk assets tends to be more cautious. The hawkish signal released by the Fed minutes will directly affect market liquidity and risk asset pricing; the rise in the 30-year Treasury yield reflects rising global risk-free rates and liquidity pressure and poses an important macro impact on risk assets such as crypto assets. It can thus be seen that although the two pieces of information belong to monetary policy and the bond market respectively, they resonate at the level of risk asset pricing.
Macro Transmission Paths to Crypto Asset Pricing
From the perspective of transmission paths, changes in the macro interest rate environment affect crypto assets through multiple channels. First, the liquidity channel. If the market expects liquidity pressure to rise, funds may prefer safe assets, and the funding environment for risk assets may tighten. Second, the valuation channel. Rising risk-free rates change discount rates and opportunity costs, thereby affecting risk asset valuations. Third, the risk appetite channel. When policy signals are tight, investors may reduce allocations to high-risk assets. The Fed meeting minutes will directly affect market liquidity and risk asset pricing, while the new high in the 30-year Treasury yield poses an important macro impact on risk assets such as crypto assets. It should be noted that current public information does not provide specific price performance or capital flow data for crypto assets, so it is more appropriate to focus on the macro variables themselves and their transmission logic rather than making judgments about short-term price direction.
Market Focus and Directions for Subsequent Observation
Subsequent market focus includes: whether the Fed's follow-up policy communication continues the hawkish signal, whether inflation risks continue to be emphasized, how rate hike expectations before the end of the year change, whether the 30-year Treasury yield can remain at a high level, and whether global risk-free rate and liquidity pressure further rise. For the crypto asset market, these macro variables may continue to affect risk appetite, funding costs, and the valuation environment. The hawkish Fed meeting minutes and the 30-year Treasury yield hitting its highest since 2002 are two key clues currently affecting risk asset pricing. Going forward, it is necessary to continue observing policy signals, long-end rate movements, and changes in the liquidity environment to assess their macro impact on risk assets such as crypto assets.
