According to ChainCatcher, the Federal Reserve announced a rate cut of 25 basis points as expected on Wednesday, but significantly raised future policy rate and inflation expectations, predicting only two rate cuts totaling 50 basis points next year, halving previous expectations.
According to 4E monitoring, after the release of the Federal Reserve's dot plot and economic outlook summary, risk aversion surged dramatically, resulting in a decline across the three major U.S. stock indices. The S&P 500 index closed down 2.95%, the Dow Jones dropped 2.58%, marking ten consecutive days of decline, the longest losing streak since 1974, while the Nasdaq closed down 3.56%. Tesla fell over 8%, leading the decline among tech giants. Cryptocurrency-related stocks broadly fell, with MSTR down 9.52% and Coinbase down 10.2%.
The Federal Reserve has caused a collapse in the U.S. stock market, leading to a significant correction in the cryptocurrency market. BTC fell below $100,000, with Powell's statement that "the Federal Reserve does not allow and has no intention of holding Bitcoin" intensifying selling pressure in the market. Bitcoin's drop reached 6.2%, currently reported at $99,235. Ethereum briefly dipped to $3,542, with a decline of 7.27%, and altcoins generally experienced double-digit declines. In the past 24 hours, the total liquidation amount in the cryptocurrency market reached $842 million, deepening market panic.
In the forex commodities sector, the Federal Reserve sharply cut interest rate expectations, causing the dollar index to rise over 1% to a two-year high; gold prices fell over 1% to a one-month low; a decrease in U.S. crude oil inventories drove up oil prices, but the slowing pace of interest rate cuts restrained the outlook for oil demand, resulting in a gradual pullback in oil prices.
After announcing a 25 basis point rate cut to 4.25%-4.5% as expected at this meeting, the Federal Reserve's published "dot plot" indicates that it expects to cut rates only two more times by 2025, halving the planned number of rate cuts compared to the September dot plot forecast, exceeding hawkish expectations, and causing extreme fear in the market. Federal Reserve officials also anticipate two more rate cuts in 2026 and one more in 2027.
