$BNB $BTC $ETH Why do expectations of the Federal Reserve cutting interest rates lead to a market crash?
On December 18, the probability of the Federal Reserve cutting interest rates is as high as 95%, which is a common prediction on Wall Street. However, not only has the cryptocurrency market seen declines in BTC, ETH, and BNB, but many altcoins have even plummeted, and U.S. stock indices have also suffered, with the Dow Jones Index setting a record for the longest consecutive decline since 1978. This phenomenon has sparked widespread attention and discussion in the market.
Although expectations for interest rate cuts are high, this information has long been "priced in" by the market, meaning that current prices already reflect this expectation. As a result, the market focus has shifted from the rate cut in December to the interest rate direction in 2025, with particular attention on the Federal Reserve's dot plot and Chairman Powell's speech tonight. Currently, the market generally expects the Federal Reserve to take a more hawkish stance, leading some risk assets to see early withdrawals of funds to avoid uncertainty.
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Today, the expectation of a decline is highly likely, as investors need to hedge ahead of tonight's Federal Reserve meeting. The focus of this meeting is no longer a 25 basis point rate cut, but rather the dot plot and Powell's speech.
In simple terms, the Federal Reserve may implement only 2 to 4 rate cuts in 2025. The higher the interest rates in 2025, the greater the probability of a black swan event, and the market will also be more concerned about the delay in easing policies. Therefore, investors' risk awareness is increasing, and a detailed explanation is also provided in the pinned tweet.
In addition to the interest rate meeting, there is also the question of whether Japan will raise interest rates in December, with results expected on the 19th. Although the probability of a rate hike is indeed not high, it is normal to hedge, and these two events today are likely to be connected to next week's Christmas.

2024.12.18 日
晚间盘解:
今晚注定是个不眠之夜，凌晨 3点的决息一定是非常激烈的！
今日市场的情绪确实是非常恐慌的，别看贪婪指数高，但是很多人肯定是不敢进场的！