1. Continued interest rate cuts → Short-term liquidity preference benefits the cryptocurrency market
For the second consecutive time, the interest rate is lowered to 3.75%-4.00%, indicating that the Federal Reserve continues to ease monetary policy.
· Interest rate cuts typically lower the yields on risk-free assets, prompting some funds to shift towards high-risk, high-reward assets, including cryptocurrencies.
· However, interest rate cuts also imply concerns about an economic slowdown, requiring attention to whether the market interprets this as a 'preemptive rate cut.'
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2. End of balance sheet reduction → Further liquidity easing
· The balance sheet reduction will end on December 1, and the principal of MBS redemptions will be reinvested in U.S. Treasury securities.
· This means that the Federal Reserve will stop withdrawing liquidity from the market and may even provide some liquidity support through reinvestment.
· For the cryptocurrency market, the expectation of liquidity tightening has weakened, which is beneficial for funds to continue staying in or flowing into risk assets.
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3. Employment market slowdown → May strengthen interest rate cut expectations
· The statement notes that "employment growth has slowed, and the unemployment rate has risen slightly."
· If the market believes that weak employment will prompt the Federal Reserve to cut rates further, it may form a logical chain of "bad economic data → more easing → favorable for cryptocurrencies."
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4. Inflation remains high → Limits future easing space
· The statement indicates that "inflation has risen somewhat since the beginning of the year and remains relatively high," which is not significantly different from before.
· If inflation remains stubborn, it may limit the Federal Reserve's future rate cut pace and even reignite the "higher for longer" expectation, which is unfavorable for cryptocurrencies.
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5. Moderate economic expansion → Hope for a soft landing remains
· The expression changed from "growth has slowed somewhat" to "expanding at a moderate pace," indicating a slightly more optimistic view of the economy.
· If the economy can achieve a soft landing, it will be beneficial for overall risk sentiment, and the cryptocurrency market may benefit from a rebound in market confidence.
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Summary: Judgment on the impact of cryptocurrency market trends
Continue to cut rates, short-term favorable, reduce funding costs, increase risk appetite
End of balance sheet reduction, medium-term favorable, stop liquidity contraction, support asset prices
