The Fed cuts interest rates, why are the market reactions so different?
Hello everyone! 👋
💡 As the Fed decided to cut interest rates by 50 basis points at its September 2024 interest rate meeting, financial markets and crypto markets performed differently, reflecting different reactions and market dynamics of investors.
🔍 Key news details
1. Bank stocks rose across the board
After the interest rate cut, bank stocks generally rose, and the market was optimistic about future earnings.
The interest rate cut reduced borrowing costs, which may stimulate the growth of banking business and boost market confidence.
2. US Treasury yields fell in the short term
The two-year US Treasury yield fell 8 basis points to 3.598%.
The decline in yields indicates that the market is cautious about the economic outlook and may affect investors' asset allocation.
3. Stock index futures generally rose
S&P 500, Nasdaq and Dow futures all rose, reflecting the market's positive response to the interest rate cut.
The rise in the stock market may be due to investors' optimistic expectations of improved liquidity brought about by the interest rate cut.
4. Spot gold rebounded slightly
Gold price returned to $2,560/ounce, with a daily increase of 0.03%.
Gold, as a safe-haven asset, has risen slightly, but we still need to pay attention to changes in market sentiment.
5. The crypto market fluctuated violently
The crypto market had a long position of 39.5553 million US dollars and a short position of 110 million US dollars in 12 hours.
The violent fluctuations in the market show the extreme sentiment of investors, and risk management is particularly important.
6. Mainstream currencies rose generally
Bitcoin broke through $62,000, Ethereum broke through $2,400, and mainstream currencies generally rose.
The rebound in the crypto market may be related to the increase in liquidity brought about by the interest rate cut, which attracted more investors.
🌟 Summary and thinking
The Fed's interest rate cut decision has triggered different reactions in the financial market and the crypto market, showing the market's complex views on the economic outlook. Investors need to pay close attention to market dynamics in order to adjust their investment strategies in a timely manner.
❓ Open discussion questions
- What do you think the long-term impact of the interest rate cut will be on the crypto market?
- Which asset classes are most worthy of attention in the current economic environment?
