The results of the FOMC meeting have been published, with important information about interest rates from the Federal Reserve:

The Fed has officially reduced interest rates by 20 basis points, slightly lower than previous expectations. This is the fourth consecutive adjustment, bringing the new target interest rate range down to 4.35% - 4.55%.

Although this move aims to support economic growth amid signs of weakening, the financial market reacted with significant volatility. Investors quickly sold off assets, creating strong downward pressure on global exchanges.

Market highlights after the report:

  1. Negative market reaction:

    • Just hours after the announcement, major stock indices like S&P 500, Nasdaq, and Dow Jones all plummeted.

    • US Treasury yields rose sharply, indicating a shift in investor sentiment toward safe assets.

  2. Reasons for the sell-off:

    • Disappointment over the reduction level: The 20 basis point cut is lower than the previous forecast of 25 basis points, raising concerns about the Fed's lack of "room" to support the economy.

    • Macroeconomic instability: Investors remain concerned about potential economic recession and the effectiveness of current monetary policies.

  3. Waiting for signals from Jerome Powell:
    The upcoming remarks from Fed Chairman Jerome Powell will be a key factor. Investors are particularly interested in:

    • Outlook for future interest rate cuts: Will the Fed maintain or accelerate cuts?

    • Inflation situation: How will recent inflation numbers affect monetary policy?

    • Risk assessment: Will Powell continue to express a "hawkish" stance or will he shift to a more dovish approach?

Advice for traders:

In this sensitive time, caution is essential. Key steps to note include:

  • Risk management: Consider reducing trade size, using asset protection tools such as options or stop-loss orders.

  • Closely monitor information: Update on statements from Powell and upcoming economic data, such as GDP and unemployment rate.

  • Limit hasty actions: The market may be highly volatile in the short term. Don't let emotions dictate investment decisions.

Conclusion:

Although the Fed's decision to cut interest rates aims to support the economy, market reactions indicate that confidence has not really returned. Given the ongoing instability, investors need to maintain calm and clarity to protect their assets.

👉 Always be prepared for unexpected shocks – the financial market has never been an easy place 🚨

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