Market Downturn Attributed to U.S. Treasury Auction and Fed Remarks

According to Odaily, analyst Cato_KT stated on the X platform that the core reason for the market downturn early today is the liquidity squeeze, which has drained the market. Two main factors contributed to this situation: Firstly, the U.S. Treasury auction led to a liquidity crunch. The auction of 3-month and 6-month U.S. Treasury bonds totaled $163 billion, absorbing a significant amount of funds from the financial markets and putting pressure on the prices of risk assets. Secondly, hawkish comments from Federal Reserve Governor Goolsbee reduced the probability of a December interest rate cut from 69.8% to 67.5%, further undermining market confidence. These two factors, one being fundamental and the other a catalyst, combined to suppress risk assets, with Bitcoin experiencing a particularly noticeable decline. The solution is straightforward: the government needs to resume operations, and the Federal Reserve should ease the short-term liquidity crunch by reducing the repurchase amount in overnight reverse repos to release some liquidity.