The Impact of Interest Rate Cuts on the Market: A Series of Rate Cuts May Not Be Beneficial
This interest rate cut is not necessarily a positive signal. The inflation scale generated by the doubling, coupled with the early morning's confident interest rate hike declaration, surprised the market. As a result, the price of Bitcoin plummeted significantly, with a single fluctuation dropping by 5,000 points; Ethereum fell by 300 points overnight, while altcoins generally corrected by over 10%. What was expected to be a benefit from the interest rate cut ultimately turned out to be "a false hope".
First Rate Cut (September 18): The federal funds target rate was lowered by 50 basis points to 4.75%—5.00%. This rate cut met market expectations, and Bitcoin's price started to rebound from $60,000, exceeding most consumers' expectations, leading to a market rally.
Second Rate Cut (November 7): The federal funds rate range was reduced by 25 basis points to 4.50%—4.75%. This rate cut also met market expectations, and the market's inflation level was still acceptable, which caused Bitcoin's price to rise to $69,000, and subsequently began to drive the market.
Third Rate Cut (December 14): The federal funds target rate was cut by 25 basis points to 4.25%—4.50%. This rate cut fully met market expectations, and with Bitcoin continuously reaching new highs, the market's bullish sentiment had already priced in the expectation of the rate cut, resulting in a relatively lukewarm market reaction after this rate cut.
