According to PANews, the US Federal Reserve has announced a cut in the target range for the federal funds rate to 4.75% to 5%, a 50 basis point cut. This is the Fed’s first rate cut since 2020 and beats market expectations. Analysts note that historically, the Fed rarely cuts rates by 50 basis points at the start of a new rate-cutting cycle unless it faces a significant economic crisis. The move signals the Fed’s aggressive monetary easing measures to address potential downside risks to the US economy. The decision reflects the Fed’s heightened vigilance over the current economic environment, particularly amid slowing consumer spending, contracting manufacturing, and a weak labor market. The goal is to achieve a soft landing for the economy and avoid a deeper recession. In a rate-cutting environment, accommodative monetary policy typically results in ample liquidity, providing relatively favorable room for growth for high-risk assets.Analysts note that virtual assets have become an important choice for investors seeking high returns due to their high volatility and strong risk preference attributes. Especially in the context of the Federal Reserve’s ongoing easing policy, concerns about the depreciation of fiat currency purchasing power may further stimulate demand for virtual assets. Typically, short-term price movements in asset prices due to rate cuts depend on the market’s interpretation of the rate cut — whether it is seen as a warning signal of potential economic problems or as a positive expectation of liquidity injection. Federal Reserve rate cuts typically reduce borrowing costs and release more liquidity into the market, which is often seen as a favorable factor pushing up the prices of risky assets. However, if the market perceives the rate cut as too large or ill-timed, it may indicate deeper structural economic problems, such as slowing economic growth, a weak labor market, or rising inflationary pressures.These factors may cause investor anxiety, leading to asset price volatility or even declines.