The Federal Reserve cut interest rates by 1 percentage point this morning, but signaled that it will slow down interest rate cuts next year. Wall Street Journal reporter Nick Timiraos, known as the "Fed's mouthpiece," wrote that the era of ultra-low interest rates may be over. If the Fed believes The neutral interest rate has risen and interest rate cuts may stop for a long time. The trade and immigration policies of US President-elect Trump will also affect the Federal Reserve's decision to cut interest rates. (Preliminary briefing: Stocks and currencies double kill! The Federal Reserve is expected to cut interest rates by only 2% next year, Tesla fell 8%, and U.S. stocks plummeted) (Background supplement: Bitcoin dropped $100,000, Ethereum fell $3,650, Bauer : The Federal Reserve is not allowed to hold Bitcoin) The U.S. Federal Reserve announced a 1-cent rate cut this morning as expected, but hinted that it will slow down the pace of interest rate cuts next year and will only cut interest rates by 2 cents instead of the 4-cent rate cut expected in September. Federal Reserve Chairman Jerome Powell also said that the interest rate is now close to neutral. As the rate cut was slower than market expectations, the major U.S. stock indexes closed sharply today, and the cryptocurrency market also plunged. In this regard, Wall Street Journal reporter Nick Timiraos, known as the "Federal Reserve's mouthpiece", wrote that how far the United States is from the neutral interest rate will be the core issue that determines the future policy direction of the Federal Reserve, and then a higher neutral rate will be achieved in the post-epidemic era. Interest rate forecasts also indicate the end of the era of ultra-low interest rates. Can’t go back to ultra-low interest rates? The neutral interest rate refers to the level that allows the economy to be at full employment and inflation is stable. This level cannot be directly observed, but requires economists and policymakers to infer based on economic behavior. If borrowing and consumption are strong, prices will If pressures rise, current interest rates may be below the neutral rate. Conversely, if lending and consumption weaken and inflation declines, interest rates may be above the neutral rate. The article pointed out that earlier this year, the discussion of the neutral interest rate was not important because interest rates were at a level that almost all Fed officials considered suppressive. However, as the Fed has cut interest rates by 1% and the economy seems to be in good condition, Well, the issue of the neutral rate has come into focus, and if it is believed that the neutral rate has risen, Fed officials may become more cautious in further cutting interest rates. Ball mentioned at the post-meeting press conference on Wednesday: We can’t know exactly where the neutral interest rate is, but what is certain is that it is closer to it than before. From here on, we have entered a new stage that will have further influence on the future. Remain cautious on rate cuts. Nick Timiraos said that after the 2008 financial crisis, economists and Federal Reserve policymakers gradually lowered their estimates of the neutral interest rate. Ultra-low interest rates and large amounts of monetary stimulus failed to bring about significant economic growth. Some economists It is believed that due to the shrinking labor force caused by the aging population and the long-term lack of demand for new investment, low interest rates will become the norm. However, some economists believe that the neutral interest rate has increased in the past few years after the large-scale fiscal stimulus during the epidemic brought the economy into a new equilibrium state. The Federal Reserve forecasts the level of long-term interest rates every quarter, which is actually an estimate of the neutral interest rate. The median forecast fell from 4.25% in 2012 to 2.5% in 2019 and will remain at this level until 2023, but the neutral rate Interest rate forecasts have risen throughout the year, with the latest forecast on Wednesday at 3%, with eight of 19 officials estimating above 3%. Trump’s policies influence interest rate cut decisions. The article mentioned that the economy remains strong despite rising interest rates, which may only reflect some temporary factors, such as an increase in immigration or companies and households locking in low-interest loans during the epidemic. However, as time goes by, if Continued economic growth may indicate that the neutral interest rate has entered a new normal of higher levels. If officials conclude that the neutral interest rate has risen, the Fed may stop cutting interest rates for a considerable period of time. As officials try to determine a neutral interest rate level, President-elect Trump has pledged to reform trade and immigration policies. New shocks may complicate determining the economy's new normal, with inflation still above target. In this case, this may further strengthen the Federal Reserve's cautious attitude in cutting interest rates. Related reports (Bitcoin fell below 104,000) The probability of the Fed cutting interest rates tonight is over 95%, but will it be suspended next year? (CPI in line with expectations) The probability that the Fed will cut by one yard next week is over 98%. U.S. stocks surged, but analysts raised three concerns: a 20% correction may occur within half a year. Trump: No plan to replace Fed Chairman Jerome Powell, December Fed The chance of another interest rate cut exceeds 85%. "Federal Reserve's loudspeaker: The era of Fed's ultra-low interest rates is over, Trump holds the key to cutting interest rates in 2025." This article was first published on BlockTempo (Dong District Dong Trend - the most influential blockchain news) media).