Bitunix Analyst: Fed’s Hawkish Signals Prompt Reassessment of Dollar Credit and Global Capital Costs

Huo Xing Finance reports: On August 6, U.S. July ADP employment data showed an increase of 44,000 jobs, indicating continued cooling in the labor market. However, Federal Reserve officials have repeatedly signaled a hawkish stance, with Kashkari, Cook, and Daly all emphasizing that further rate hikes remain an option if inflation does not sustainably improve, prompting markets to re-recognize that economic slowdown does not necessarily imply an immediate shift toward monetary easing. Meanwhile, the U.S. Treasury announced it will maintain its current pace of debt buybacks and issuance, indicating that markets will continue to absorb substantial U.S. government bond supply in the near term. Persistently high long-term yields also suggest that financial conditions are tightening organically through market mechanisms. What truly impacts global asset valuations is no longer solely whether the Fed raises rates, but rather the combined effect of massive government financing needs, elevated long-term interest rates, and rising market risk premiums driving up global capital costs. On the geopolitical front, while Iran and Oman are nearing an agreement on shipping protocols in the Strait of Hormuz, temporary arrangements remain in place, and full resumption of navigation still depends on progress in U.S.-Iran negotiations. Even as the risk of supply disruptions declines, Iran’s efforts to gain greater control over and charge fees for the shipping lane indicate that uncertainties in the global energy supply chain remain unresolved, and energy prices may continue to fluctuate due to policy and negotiation developments. From a market structure perspective, global capital is currently navigating an environment characterized by high capital costs, sustained government financing, expansion of AI infrastructure, and energy-related geopolitical risks simultaneously. As a result, capital allocation is increasingly prioritizing capital efficiency and cash flow quality, while high-valuation and highly leveraged assets continue to face significant discounting pressure. In the cryptocurrency market, ETFs recorded net inflows of $475 million over the past week and $922 million over the past month, indicating that short-term institutional capital continues to replenish risk assets. However, over the past quarter, cumulative outflows totaled $7.932 billion, reflecting large investors’ relatively conservative positioning overall. This suggests the market is not entering a broad-based risk-on phase, but rather continuously seeking a new equilibrium in asset pricing amid global liquidity conditions, long-term yields, and policy uncertainty. Bitcoin will remain dominated in the short term by U.S. dollar liquidity, global capital costs, and shifts in risk appetite. Whether ETF inflows can transition from short-term rebounds to sustained inflows will be a key indicator to watch for future market direction.