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In the wake of consecutive pauses in rate hikes by the Federal Reserve (Fed) in November and September, as stated in the FOMC statement released at 3 a.m. today (14), the federal funds rate was maintained for the third time in the range of 5.25% to 5.50%, aligning with market expectations. What excites investors is that Chairman Powell revealed that a rate cut is also in the Fed's considerations.
Officials project: three rate cuts in 2024
Although the FOMC statement still emphasizes achieving a 2% inflation rate as its ultimate goal, the latest economic data indicates a slowdown in economic growth compared to the third quarter, with strong employment and unemployment remaining at low levels. Therefore, Fed officials, while deciding to keep the rates unchanged, have also begun discussing the timing of rate cuts.
Chairman Powell stated: "This will be a theme as we look forward," and Fed officials expect three rate cuts of 25 basis points next year, which is expected to significantly boost the market.
According to the dot plot, Fed officials also expect four more rate cuts in 2025, believing that there will no longer be a need to alleviate CPI pressure by raising rates, as inflation is expected to slow to 2.8% by the end of this year and drop to 2.4% by the end of 2024.
Bitcoin surges past $43,000
In response to the Fed's announcement of no rate hike and the incentive to consider rate cuts next year, Bitcoin reached a high of $43,475 at 6 a.m. today (14). It slightly pulled back before the deadline, trading at $42,773, with a 3.2% increase in the last 24 hours.
Ethereum also showed an upward trend, reaching a high of $2,284 earlier and trading at $2,255 before the deadline, with a 2.3% increase in the last 24 hours.
All four major US indices rise
Turning to the US stock market, performance has been impressive, with all four major indices rising, and the Dow hitting a historic high:
- Dow Jones Industrial Average: up 512.3 points (1.4%), closing at 37,090.24 points
- Nasdaq Composite: up 200.57 points (1.38%), closing at 14,733.96 points
- S&P 500: up 63.39 points (1.37%), closing at 4,707.09 points
- Philadelphia Semiconductor Index: up 60.77 points (1.55%), closing at 3,990.95 points
US 10-year bond yield falls below 4%
Additionally, the US 10-year Treasury bond yield has shown a significant decline, falling below 4% at the time of writing. Jeffrey Gundlach, the founder of DoubleLine Capital, known as the "Bond King," predicts that the US 10-year Treasury bond yield will drop to a level closer to 3% next year. |
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Post time 21-12-2023 21:43:45