Fundstrat strategist Tom Lee, known as the "Wall Street Oracle," has issued a warning to investors that the market is currently too optimistic about expectations for potential Federal Reserve rate cuts. Lee stated that while the U.S. economy has shown signs of slowing, persistent inflation remains a significant concern. He believes the Federal Reserve faces a difficult choice.

Lee explained: "On one hand, the economy is showing signs of slowing, and lowering interest rates might provide stimulus." He added: "On the other hand, inflation remains a concerning issue, and cutting rates too early could exacerbate inflation." He believes the market's current expectations for rate cuts are overly optimistic.

Lee emphasized that the Federal Reserve should continue to "rely on data and not make hasty decisions," stating that major action should only be taken after clear evidence emerges of slowing inflation and labor market weakness.

Lee linked this uncertainty to large investors' behavior, noting it as a key reason why institutions were reluctant to buy during the market decline in April. He stated that "uncertainty over Fed policy is a major factor in their cautious stance," while market volatility has also been high.

During this period, Lee's communications with various institutions showed their attitude is "cautious but not pessimistic," and they are "still waiting for clearer signals" before actively deploying capital.

This cautious, data-driven analytical approach is a hallmark of Fundstrat's strategy. Lee stated that this strategy formation stems from the company's successful bet on the technology sector in 2014. This decision "reinforced the importance of looking beyond traditional metrics and focusing on long-term trends." This long-term perspective now influences his assessment of macroeconomic conditions and Fed policy.

Notably, Tom Lee is also one of Wall Street's most prominent cryptocurrency bulls. Under Lee's leadership, Bitmine Immersion Technologies (BMNR.US) has transformed into a pioneer in aggressively building Ethereum reserves. Arkham data shows that Bitmine spent $45 million over the weekend to acquire an additional 9,613 Ethereum tokens, currently holding Ethereum worth $7 billion.

Prior to this, after Federal Reserve Chairman Jerome Powell hinted at upcoming rate cuts last Friday, cryptocurrencies surged alongside the broader market. Following last Friday's first new all-time high since 2021, Ethereum reached new highs again over the weekend. On Sunday afternoon, the world's second-largest cryptocurrency briefly surged to a high of $4,954.81.