The Fed cut interest rates by 50BP, starting a cycle of interest rate cuts
This rate cut far exceeded the market's general estimate of 25 basis points, directly cutting interest rates by 50 basis points. Powell emphasized at the press conference that he did not think that a sharp interest rate cut indicated that the US economic recession was approaching, nor that the job market was on the verge of collapse. The interest rate cut was more of a preventive action to maintain the current state of the economy and labor market. The market generally expects that interest rates will continue to be cut in November and December. It is expected that there will be another 70 basis point interest rate cut this year. The published dot plot suggests that there will be another 50 basis point interest rate cut this year. The interest rate cut will have a lasting positive effect on risky assets. Although it may not be effective immediately, as time goes by and the interest rate cut continues, the liquidity of the market begins to flow out of bonds, banks, etc. and pour into stocks, cryptocurrencies and other markets. In early November this year, the upcoming US presidential election will also bring short-term shocks to the crypto market. After the results are officially announced, the lingering OTC funds may begin to be continuously injected into the crypto market. Since September 12, Bitcoin spot ETF has achieved net inflows for 4 consecutive days.
For the secondary market, although this rate cut cannot drive the market to a violent rise, it can at least start a cycle of rate cuts, which is definitely good for the long term; in the short term, it still needs to be shaken and cleaned, but as long as the cycle is there, we can make friends with time
Wish you all good fortune [fist]
