SoSoValue: Today's market risk sentiment VIX index rose to its highest point since early August (Bank of Japan's rate hike), the market may be overreacting, suggesting to maintain risk exposure.

ChainCatcher message, according to SoSoValue macro sector display, on December 18th monetary policy meeting, the Federal Reserve lowered interest rates by 25 basis points as expected, reducing the target range for the federal funds rate to 4.25%-4.50%. For next year's rate cut pace, the Federal Reserve adjusted its expectations from the previous 'four rate cuts' to 'two' through the latest dot plot. In addition, the Federal Reserve raised its expectations for future core PCE inflation and GDP growth, consistent with Powell's remarks, all conveying a more 'hawkish' signal than the market expected. Data shows that the market risk sentiment VIX index rose to its highest point since early August (Bank of Japan's rate hike).

SoSoValue analysts state that the FOMC proposed an unexpectedly aggressive rate cut plan, coupled with Powell's 'hawkish' remarks, led to a shift in market sentiment towards panic, with U.S. Treasuries even in a state of excessive reaction. The U.S. stock market subsequently corrected, while the dollar strengthened. Overall, all risk assets reacted strongly to the FOMC's latest signals. Based on macro data assessment, we believe the fundamentals of the U.S. economy remain unchanged, the dollar remains strong, and consensus strong assets such as cryptocurrencies continue to be the destination for capital inflows. Each market correction brought about by sentiment in market games is a good entry point, suggesting that risk exposure can be maintained at present.