QCP: FOMC meeting brings upward catalyst to the market, and the options market turns back to call options

Odaily News QCP posted on its official channel that last night's FOMC meeting brought the market a long-awaited catalyst for the rise, pushing the price of Bitcoin above $85,000, a sharp rise. The Federal Reserve decided to scale back its "quantitative tightening" program starting in April. The market interpreted this as an indirect rate cut, reinforcing expectations that the Federal Reserve will begin easing policies as early as June.

As of this writing, markets are pricing in three rate cuts in 2025, in June, September, and December. Beyond the immediate euphoria, the Fed’s tone was distinctly cautious. Policymakers cut their growth forecast to 1.7% (a 0.4 percentage point reduction) while raising their inflation forecast to 2.8%, suggesting rising stagflation risks. Moreover, the Fed’s dot plot showed a more hawkish shift from December, with the number of officials who foresee no rate cuts in 2025 rising to four.

In the options market, market positioning has returned to normal, with skewness moving back toward calls. This is in stark contrast to the skewness favoring puts earlier in the week. The key test now will come when the U.S. market opens tonight.