The U.S. Federal Reserve (Fed) announced an interest rate cut of 2 points at 2 a.m. today, raising the benchmark interest rate to 4.75 ~ 5.0% in response to the slowdown in the labor market. According to the "dot chart", the committee predicts that it will cut interest rates by another 2 points before the end of this year. It will lower the benchmark interest rate to a range of 4.25% to 4.50%, with a total of 4% interest rate cuts by the end of 2025. The Fed cut interest rates more than many analysts expected, demonstrating its determination to proactively deal with the economy.

Fed Chairman Jerome Powell said the interest rate cut was to maintain economic progress and was not a serious concern about the economy. He pointed out that economic activity is currently solid and growth in the second half of the year is expected to be similar to that in the first half, with no signs of recession. He emphasized that no fixed interest rate path has been set and a 2-digit interest rate cut should not be regarded as the norm. Inflation levels are close to the target, but inflation risks have weakened and labor market risks have increased.

The FOMC statement noted that the committee is increasingly confident that inflation will move toward 2%, with officials expecting the unemployment rate to rise to 4.4% and inflation to fall to 2.3% this year. The Fed expects the long-term neutral interest rate to be around 2.9% and lowered its core inflation forecast to 2.6%. Although inflation is still higher than the target, the Federal Reserve chose to cut interest rates, and the U.S. economy is expected to grow by 3% in the third quarter. The crypto market has responded positively to this, with the current price of Bitcoin quoted at $61,886, a single-day increase of 3%.

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〈MICA Daily｜The Fed announced a 2-digit interest rate cut that was more aggressive than expected, and cryptocurrencies rose〉 This article was first published on "Blocker".