Last night, the Federal Reserve shocked the market by announcing a 25 basis point cut in the benchmark policy rate to a range of 4.25%-4.5%. Although this decision was in line with market expectations, the hawkish tone in the statement and the fine-tuning of economic forecasts caused a huge market shock!
The cryptocurrency market suffered a sharp setback in an instant, and mainstream currencies and altcoins such as Bitcoin, Ethereum, Dogecoin, and Solana plummeted. Market sentiment took a sharp turn for the worse and investors fell into panic.
The Federal Reserve sent a hawkish signal, causing market shocks
Federal Reserve Chairman Jerome Powell strongly warned at a press conference that although this rate cut was in line with market expectations, the pace and magnitude of future rate cuts may be far lower than previously optimistic expectations.
Powell revealed that the Federal Reserve expects only two rate cuts in 2025, and significantly raised its inflation forecast from 2.1% to 2.5%, showing deep concerns about future inflationary pressures!
More concerning, Powell pointed out that the high uncertainty of future economic policies, especially the protectionist measures that the Trump administration is about to implement - such as tariffs on imported goods, large-scale deportations of undocumented immigrants, and possible expansion of fiscal deficits - will force the Fed to maintain a more cautious stance.
These potential policy changes may trigger more intense inflationary pressures, and global markets will undoubtedly feel the impact strongly.
Bitcoin leads the decline, and the crypto market is under pressure across the board
After the Fed announced the rate cut, the price of Bitcoin quickly suffered a heavy blow, plummeting 5.6% in just a few hours to the $100,000 mark. Although it rebounded immediately, market sentiment remained nervous.
Ethereum's decline was even more dramatic, plummeting 6.96% to $3,600 at one point. Popular altcoins such as Dogecoin and Solana were not spared. Solana fell more than 7%, while Dogecoin suffered a heavy blow due to high volatility, falling more than 8%.
The entire altcoin market fell across the board, and the declines of second- and third-tier assets were even more shocking, with some even exceeding 10%. The market was wailing, and investors were questioning the future trend.
