According to ChainCatcher news, the Federal Reserve announced a 25 basis point rate cut as expected on Wednesday, but significantly raised future policy rate expectations and inflation expectations, anticipating only two rate cuts totaling 50 basis points next year, halving previous expectations.
According to 4E monitoring, after the release of the Federal Reserve's dot plot and economic expectations summary, risk aversion has sharply increased, causing all three major US stock indices to fall. The S&P 500 index closed down 2.95%, the Dow Jones down 2.58%, marking a ten-day consecutive decline, the longest streak since 1974, and the Nasdaq closed down 3.56%. Tesla fell over 8%, leading the decline among tech giants. Crypto-related stocks fell broadly, with MSTR down 9.52% and Coinbase down 10.2%.
The Federal Reserve has caused a crash in the US stock market, leading to a major correction in the crypto market. BTC has fallen below $100,000, and Powell's statement that 'the Federal Reserve does not allow and does not intend to hold Bitcoin' has intensified market selling pressure, with Bitcoin dropping by as much as 6.2%, currently reported at $99,235. Ethereum once dipped to $3,542, with a decrease of 7.27%, and altcoins generally showed double-digit declines. In the past 24 hours, the total liquidation amount in the cryptocurrency network reached $842 million, deepening market panic.
In the forex commodities sector, the Federal Reserve has dramatically cut interest rate expectations, causing the dollar index to rise over 1% to a two-year high; gold prices have fallen over 1% to a one-month low; a decline in US crude oil inventories has pushed US oil higher, but a slowdown in interest rate cuts has suppressed the oil demand outlook, resulting in oil prices rising and then falling, gradually erasing gains.
After announcing a 25 basis point rate cut to 4.25%-4.5% as expected at this meeting, the Federal Reserve's released 'dot plot' indicates that it is expected to cut rates only two more times by 2025, halving the planned rate cuts compared to the September dot plot forecast, with a more hawkish stance than anticipated, leading to extreme fear in the market. Federal Reserve officials also expect to cut rates two more times in 2026 and once more in 2027.
