December 19 news, the Federal Reserve lowered the benchmark interest rate by 25 basis points as scheduled on Wednesday, while significantly raising future policy interest rate and inflation expectations. It is expected that there will only be two rate cuts next year, totaling 50 basis points, which is half of the previous expectation.
According to monitoring data from BiyaPay, after the Federal Reserve released the dot plot and economic outlook summary, market risk aversion sharply increased, and all three major U.S. stock indices fell. The S&P 500 index fell by 2.95%, the Dow Jones Industrial Average dropped by 2.58%, marking ten consecutive trading days of decline, setting the longest losing streak since 1974, and the Nasdaq index fell by 3.56%. Tesla's stock price fell by more than 8%, becoming the biggest loser among tech giants. Cryptocurrency-related stocks generally declined, with MSTR down 9.52% and Coinbase down 10.2%.
The Federal Reserve's actions led to a stock market crash, and the cryptocurrency market also experienced a significant pullback. The price of Bitcoin fell below $100,000, and a statement from Fed Chairman Powell saying 'the Federal Reserve does not allow and has no intention to hold Bitcoin' further intensified market selling pressure, with Bitcoin down 6.2%, priced at $99,235 at the time of writing. Ethereum briefly touched $3,542, with a decline of 7.27%, and other altcoins generally saw double-digit declines. In the past 24 hours, the total liquidation amount in the cryptocurrency market reached $842 million, intensifying market panic.
In the foreign exchange and commodities markets, the Federal Reserve significantly lowered its rate cut expectations, resulting in the dollar index rising by over 1%, reaching a two-year high; gold prices fell by more than 1%, hitting a one-month low; a decrease in U.S. crude oil inventories pushed oil prices higher, but the slowdown in rate cuts suppressed expectations for oil demand, leading to a retreat in oil prices after a surge, gradually digesting the gains.
The interest rate dot plot released by the Federal Reserve indicates that only two rate cuts are expected by 2025, a hawkish stance that exceeds the predictions from the September dot plot, resulting in extreme panic in the market. Federal Reserve officials also expect two more rate cuts in 2026 and one more in 2027.
BiyaPay is a global multi-asset trading wallet that supports depositing USDT and exchanging it for dollars before withdrawal, effectively solving the problem of fund freezes for cryptocurrency users, ensuring funds are always available for withdrawal, and guaranteeing liquidity and ease of use. BiyaPay is also a platform that supports trading various assets including cryptocurrencies and stocks. BiyaPay reminds users to pay attention to market volatility risks and to allocate assets reasonably.