Alvin Liew, senior economist at UOB, pointed out in his latest report that the Federal Reserve may cut interest rates by 75 basis points next year. He mentioned that although it was not surprising that the Fed hinted that it might slow down the pace of easing in the future, the market's reaction to the reduction in the rate cut was beyond expectations. UOB analysis believes that the adjustment of interest rate cut expectations reflects the expectation of increased inflationary pressure caused by the trade tariff policy that may be implemented after the Trump administration takes office.
Liew further stated that UOB expects the Federal Reserve to cut interest rates three times in 2024 and continue until early 2025 until the policy direction of the Trump administration becomes clearer. Based on this expectation, the market may need to be sensitive to economic and policy changes in the coming months, especially in trade policy and inflationary pressures.
This expectation is crucial for financial markets and the cryptocurrency sector, especially in the context of the increasingly complex interaction between the Federal Reserve's monetary policy and market liquidity, interest rate cuts and changes in economic policies may have a profound impact on risky assets.
