The Federal Reserve (Fed) recently made a significant move by cutting interest rates by 50 basis points, causing a ripple effect across financial markets. Following this decision, Fed Chair Jerome Powell held a press conference that sparked varied reactions among market participants and economists. While some viewed the Fedâs rate cut positively, others expressed concerns that it could lead to an economic slowdown.
Fedâs Rate Cut and Market Reactions
Brad Bechtel, Global Head of FX at Jefferies, noted that the rate cut caught many by surprise. âBefore the rate cut, market expectations were divided. Some anticipated a larger cut, while others didnât expect any change at all,â said Bechtel. He emphasized that the Fedâs move was an attempt to prevent economic stagnation, and the marketâs response so far has been moderate. According to Bechtel, the decision was largely priced in by the market.
Powellâs remarks during the press conference were also noteworthy. He stated, âWeâve started the rate cuts on a strong footing, and weâre happy to continue this process.â Some analysts believe that Powell is seeking broader support from the committee to pursue more aggressive rate cuts in the future. The decision was also influenced by the Beige Book report, which painted a pessimistic picture of the U.S. economy. Powell has historically relied on these reports when shaping monetary policy.
Diverse Reactions to Powellâs Statements
Bond market icon Jeffrey Gundlach, known as the âNew Bond King,â adopted a cautious stance regarding further rate cuts. Gundlach pointed to current economic data and noted that Powellâs assertion that the economy wasnât under significant pressure could open the door for another 50 basis point rate cut in November. This uncertainty could also impact the market following the U.S. presidential election.
On the political front, Fed Chair Powell faced criticism. U.S. Senator Elizabeth Warren argued that Powell had been too slow in lowering interest rates. âThis rate cut provides some relief, but more cuts are needed to support consumers and prospective homeowners,â Warren said. She suggested that had Powell acted sooner, the economic challenges might not have been as severe.
Bitcoinâs Rise and Crypto Trader Success
The Fedâs rate cut didnât just affect traditional markets; it also stirred the cryptocurrency market. Over the past 24 hours, Bitcoin surged 2.4%, reaching $62,000. Other major cryptos like Solana (SOL), BNB, XRP, and Cardano (ADA) followed suit, with some seeing increases of up to 6%.
Meme coin projects were also impacted by this rate cut-driven market activity. According to on-chain analysis platform Lookonchain, a whale investor profited greatly from the meme coin Popcat (POPCAT). This trader reportedly made $1.2 million in a week by capitalizing on the Fedâs decision and the subsequent price surge of POPCAT, which rose by 22% to $0.869.
The smart whale made more than $1.2M on $POPCAT again!
He spent 4.13M $USDC to buy 6.11M $POPCAT at $0.68 on Sept 12 and Sept 13, now worth $5.32M, with an unrealized profit of $1.21M!https://t.co/lwNqWGB6Ib pic.twitter.com/IbDQy3DRcJ
â Lookonchain (@lookonchain) September 19, 2024
This smart money has spent 4.13M $USDC to buy 6.11M $POPCAT at an average price of $0.68 through 2 wallets in the past 2 days!
Address:https://t.co/Or4O9Xx6TQhttps://t.co/ahP5w9Zs4zhttps://t.co/iRLSfIKLSb pic.twitter.com/CV8b6GvLwZ
â Lookonchain (@lookonchain) September 13, 2024
As the Fedâs 50 basis point rate cut reverberates across markets, both traditional and crypto investors are watching closely. The cryptocurrency market has seen significant gains, and in some cases, traders are turning huge profits. This recent development in the crypto world underscores the importance of staying informed and agile in a fast-moving financial landscape.