Once the Federal Reserve starts the process of cutting interest rates, the probability of a mad bull market will significantly increase, indicating that 2025 is very likely to become the year of the mad bull. However, there are also views that the real climax of the bull market may come before the first interest rate cut. The reason is that the interest rate cut, as a good news, may trigger a market correction. The historical trend of the U.S. stock market is evidence of this.
However, not all market observers agree that we are currently in a bull market, and some bloggers predict that 2025 may be the end of the bull market, or even assert that the bull market has quietly ended. But in the long run, it is still possible to continue this bull market in the next few years, or even open a new chapter of the long-term bull market, and the key to all this still lies in the evolution of expectations for interest rate cuts.
It is worth noting that the expectation of interest rate cuts itself may also become a catalyst for market fluctuations. However, historical experience tells us that the situation is often more complicated. Looking back at the Fed's interest rate cut cycle in July 2019, the federal funds rate was gradually lowered until it fell to near zero in March of the following year. The entire interest rate cut process lasted nearly eight months. However, it was in the months after the end of the interest rate cut cycle that the cryptocurrency market ushered in a real bull market.
Based on this historical law, we can reasonably speculate that even if the interest rate cut cycle begins in 2025 and lasts for about a year from September this year, the bull market in the cryptocurrency market may present a more spectacular scene. As an important positive factor, the full release of the interest rate cut effect requires time accumulation, as shown in the previous round of interest rate cuts.
The length and depth of this round of interest rate cuts are also worth our attention. Given that the current interest rate level is as high as 5.5%, there is considerable room for future interest rate cuts. It is expected that the interest rate may drop to around 2%, or even lower, to achieve the goal of stimulating the economy. As for the specific path and end point of the interest rate cut, it is an unknown in the future and needs to be adjusted flexibly according to economic data and market reactions.
