Cryptocurrency investors are looking forward to a "soft landing" for their assets and a positive price trend.

Author: Jack Inabinet, Bankless

Translation: Shanooba, Golden Finance

The Federal Reserve has just announced a rate cut, the first since the outbreak of the pandemic, as expected, with a significant 50 basis point reduction. This long-awaited decision immediately sparked excitement among stock and cryptocurrency investors.

Powell's printing press has finally restarted, which is why many in the market are optimistic that this rate cut may trigger another cryptocurrency bull market.

In 2022, the Federal Reserve raised interest rates to combat high inflation, leading to an increase in borrowing costs and a decline in asset prices, triggering a bear market. However, with the decline in interest rates, many expect that the loose monetary policy may gently guide the global economy to achieve a "soft landing."

If inflation no longer soars and the rate cut helps to maintain a stable unemployment rate, central bank governors can achieve an incredible feat - eliminating significant economic uncertainty and achieving a level of global economic stability unseen in decades!

Although the Federal Reserve's latest economic forecasts seem to lean towards further rate cuts in the future, they also reflect the uncertainty of the situation, with inflation forecasts being revised downward and GDP estimates remaining flat, while unemployment rate expectations are significantly rising.

The biggest economic risk has shifted from rising inflation to declining employment rates, and the rate cut decision is evidence of this. Although Federal Reserve members and other central bank governors are confident in managing these risks through further rate cuts, any sustained economic downturn could quickly evolve into serious recession concerns.

Global bond yields, which have been rising since Tuesday, only saw a slight decline after the rate cut confirmation, indicating that the market has already taken this factor into account and recovered from the early decline since July. Although Bitcoin briefly rose by about 2% after the rate cut news, the market quickly began to sell off, erasing the gains before the close.

While the initial excitement brought by the rate cut is evident, the market's rapid reversal indicates that uncertainty still exists. Investors are now closely watching the economy's response to these changes, hoping for a smooth transition but remaining cautious about potential turbulence in the future. As the balance between inflation, employment, and growth continues to unfold, whether this will truly trigger the next round of cryptocurrency bull market or lead to deeper recession concerns remains to be seen.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。