Exchange DeepThink: Ongoing US government shutdown continues to disrupt data visibility, market focuses on potential QE after Fed pivot

BlockBeats News, November 10, DeepThink columnist and Research analyst Chloe from a certain exchange pointed out that the U.S. government shutdown has lasted for over a month, with no substantial progress in budget negotiations between the two parties. This has resulted in a lack of official economic data, forcing the market to rely on private sector indicators to gauge economic trends. ADP data shows that in October, the private sector added only 42,000 jobs, with wage growth steady at 4.5%, indicating a significant cooling in the labor market. The strengthening U.S. dollar caused gold to fall about 1.5% over the week, and market expectations for a rate cut in December dropped to around 71%.

On-chain data shows that bitcoin whales reduced their positions at high levels and then accumulated again at lower levels. Institutional buying continues to enter the market through OTC channels. Net inflows of stablecoins reached $2.8 billion, but the growth rate has slowed, reflecting that capital remains on the sidelines.

The Federal Reserve announced that it will end quantitative tightening (QT) starting in December and will reinvest maturing MBS funds into short-term Treasury bonds, signaling liquidity easing. The market expects that if the government shutdown ends and economic data resumes, the Federal Reserve may consider restarting quantitative easing (QE) early next year to address weak demand for U.S. Treasuries and the risk of high yields. Analysts believe that subsequent policy direction will depend on the outcome of fiscal negotiations and the December FOMC meeting.