The Federal Reserve announced at 2:00 AM Beijing time on June 19, 2025, that it will maintain the target range for the federal funds rate at 4.25%–4.50%, and has paused interest rate cuts for the fourth consecutive meeting.

When you see news like 'the Federal Reserve pauses interest rate hikes and may start cutting rates within the year,' do not only focus on the positive side. This is when the market is most prone to 'selective optimism.'

Although the Federal Reserve hinted that there may be up to two rate cuts this year, this is based on the premise of 'inflation continuing to decline,' whereas currently commodity inflation has rebounded and service sector inflation remains stubborn;

Seven committee members do not support a rate cut this year, indicating that the internal consensus at the Federal Reserve has already loosened;

If the market overestimates rate cut expectations again, it will face a 'disappointment correction,' especially in the stock and cryptocurrency markets.

⟶ You need to be prepared for the possibility of delayed rate cuts or even complete abandonment of cuts.

Second, do not treat 'pausing rate hikes' as a no-risk signal to go long.

For the past two years, there has been a persistent 'decoupling' between Federal Reserve policy and the market: every time the market prematurely speculates on a shift, it ultimately gets slapped by reality. Currently:

High rates are still suppressing corporate financing and consumer credit;

Although employment data is strong, it may also continue inflation rather than signify a safe landing;

Risk assets (especially the cryptocurrency market) have partially priced in rate cut expectations.

⟶ The more everyone is bullish, the more risk is concentrated in the opposite direction.

Third, structural opportunities exist, but a defensive mindset should be maintained.

If you still want to operate, you can focus on:

Interest rate-sensitive assets: such as technology growth stocks and high-leverage corporate bonds;

Short-duration bonds and cash-like instruments: conservative investors can still enjoy high returns;

Cyclical lagging assets: certain sectors that benefit from peak interest rates (such as REITs and financial stocks);

But this does not mean you can go all in with heavy positions or gamble recklessly.

⟶ Controlling positions and prioritizing defense is the attitude a mature investor should have to avoid excessive optimism.

This is not the 'starting point of a bull market,' but rather a 'policy game interval.'

Do not let news headlines lead you; those who truly make money are not because they know about 'pausing interest rate hikes,' but because they can predict earlier than others 'when the policy reversal will fail.'

Now is not the time to bet, but rather a stage for screening opportunities, controlling risks, and waiting for confirmation.

If you have already made a profit, do not be greedy;

If you are still losing, do not gamble.