The Federal Reserve and the Global Effect of the New Rate Cut
The recent cut of 25 basis points by the Federal Reserve (leaving rates between 4.75% and 4.00%) marks a turning point for the global economy. This measure aims to stimulate employment and sustain growth amid fiscal uncertainty and the partial shutdown of the U.S. government.
Benefits for the general market:
The rate reduction makes credit cheaper, improves business investment, and reactivates consumption, boosting sectors such as housing, durable goods, and equities. Emerging markets also benefit from a weaker dollar, alleviating pressure on external debt.
Risks and adverse effects:
On the other hand, additional liquidity may reignite inflation and pressure savings margins. Moreover, if the stimulus does not translate into real productivity, a bubble in financial assets could be generated.
Global consequences:
The impact will extend to interconnected economies, temporarily strengthening stock market confidence but weakening regional currencies. Europe and Latin America may see more stable capital flows, although vulnerable to sharp changes in Fed expectations.
Implications for the crypto market:
The historically low-interest environment drives demand for alternative assets like Bitcoin and Ethereum by reducing the appeal of bonds and strengthening the narrative of decentralized refuge. However, high crypto volatility may be amplified by monetary expansion.
Short-term outlook:
With monetary supply still open, the economy could experience a temporary rebound in consumption, but also greater inflationary pressure in the coming months if issuance and public spending are not moderated.
