1. Nature of interest rate cut: The core logic of a hawkish rate cut
1. The rate cut magnitude meets expectations but the attitude is cautious
- The Federal Reserve cut interest rates by 25 basis points as expected (federal funds rate lowered to 3.5%-3.75%), aligning with a 94% probability expectation from the market.
- Hawkish signals are reflected in:
- Powell emphasized 'data-driven decisions', clearly opposing the market's bets on aggressive rate cuts in 2026;
- The dot plot suggests only 2 rate cuts in 2026 (fewer than the market expectation of 3-4);
- Multiple committee members oppose the rate cut, believing that controlling inflation should take priority.
2. Policy objectives focus on inflation rather than employment
- Despite the unemployment rate rising to 4.4%, core inflation remains high at 3.3%, and the Federal Reserve is more concerned about the risks of tariff policies driving secondary inflation.
- Former Federal Reserve official Clarida pointed out: 'The Federal Reserve needs to communicate a clear signal of stable prices.'
II. Impact on the virtual currency market
Short-term bearish factors
1. The 'sell the fact' effect triggers sell-off:
- The market has already digested the expectations of interest rate cuts, and after the good news is out, leveraged longs are concentrated in closing positions.
2. US dollar liquidity has not significantly improved:
- The Federal Reserve did not mention expanding its balance sheet (only stopped the reduction), actual liquidity injection is lower than expected;
- The US dollar index rebound suppresses the valuation of risk assets.
Medium to long-term differentiation logic
1. Positive factors gradually accumulate:
- Capital substitution effect: A low-interest-rate environment weakens the attractiveness of fixed-income assets, and funds may gradually shift to alternative assets like Bitcoin.
- Regulatory clarity: The US (Market Structure Act) passed, attracting institutional funds to enter the market.
- Halving cycle expectation: The 2026 Bitcoin halving may resonate with the interest rate cut cycle.
2. Risk warning:
- If inflation rebounds, the Federal Reserve may pause interest rate cuts, and virtual currencies will face liquidity contraction pressure;
- Trump's tariff policy may strengthen the dollar and suppress cryptocurrency prices.
III. Summary and recommendations
- Nature of interest rate cuts: Hawkish cuts (cutting rates but suppressing future easing expectations).
- Virtual currency strategy:
- Short-term: Beware of high leverage contract risks, pay attention to the volatility triggered by Powell's speech;
- Long-term: Retracement is a layout opportunity, focusing on allocating Bitcoin (macro hedging properties) and compliant altcoins (such as ETH, SOL).
