The long-awaited interest rate cut is coming!
I believe everyone is already impatient for this rate cut. The critical moment is coming tonight. Will the impact of this rate cut be bright or silent? This is a "decisive moment" that will free the world's largest economy from a long period of rising borrowing costs.
“This is a huge positive for Americans and the entire global economy,” said Mark Zandi, chief economist at Moody’s Analytics. “It will largely remove the pressure from the Fed on the economy and allow the economy to move forward. This has already helped, and stock prices are higher than they would have been without this situation.”
The probability of the Fed cutting interest rates by 50 basis points this week is 63%.
On September 18, according to CME's "Fed Watch" data, the probability of the Federal Reserve cutting interest rates by 25 basis points in September was 37.0%, and the probability of cutting interest rates by 50 basis points was 63.0%.
While rate cuts are good news for risk assets, Lennix Lai, chief commercial officer at OKX Global, believes that asset prices are unlikely to "only go up" from now on, so traders should be prepared for continued volatility.
“Given the current uncertainty in the market, the market is likely to be quite volatile for the rest of the month as traders react to broader economic indicators,” Lai said. “While short-term volatility is to be expected as traders react to economic indicators, increased institutional participation in the cryptocurrency market is likely to provide more stability and liquidity in the medium to long term.”
According to an Economist Impact Report commissioned by OKX, “69% of institutional investors plan to increase their allocation to digital assets in the next 2-3 years, indicating that confidence in the cryptocurrency market is growing despite short-term uncertainty.
Powell press conference focuses on interpretation of interest rate decision
Fed Chairman Powell will speak at the press conference after the interest rate meeting. His words often provide more background and details, especially for the considerations behind the policy.
If he hints in his speech that the Fed is ready to cut interest rates further or expresses concerns about economic risks, the market may adjust its investment strategy accordingly. In addition, how Powell "explains" the extent of the rate cut (such as 25 basis points or 50 basis points) will also affect the volatility of the financial market.
Jeffrey Gundlach, CEO of DoubleLine Capital, said
He expects the Federal Reserve to cut its benchmark interest rate by 50 basis points early Thursday morning and a total of 125 basis points by the end of the year; he believes that the U.S. economy is already in recession and that the Fed's tightening policy has lasted too long.
But some investors said a bigger rate cut could raise concerns about the health of the economy. Adam Turnquist, chief technical strategist at LPL Financial, commented: "A 50 basis point rate cut could further suggest that the Fed is not optimistic about the labor market, which would be a more worrying sign."
summary
There are many opinions about this rate cut, but don’t create too much anxiety, just like a storm, we look forward to it but are afraid of it! But the reason why everyone is looking forward to it is that this rate cut will become a weather vane for the market in the future, completely opening up the two-sided market. After all, the currency circle is currently close to the United States. As long as the road is opened, opportunities will come out, which is what everyone wants to see! Of course, I still look forward to a 50 basis point rate cut, and that is all for the future market.
