From a long-term perspective, not cutting interest rates is the best support for the US stock market and cryptocurrencies

During this period, the market is most concerned about whether the Federal Reserve will cut interest rates. Recently, soft data (such as confidence indices and survey data) seems relatively strong, while hard data (employment, consumption, production) appears weak. Powell has directly stated that he will not act rashly based on data, will not engage in any preventive measures, and will only make decisions based on comprehensive data. Many people interpret this as the Federal Reserve waiting until the economy really has problems before taking action, which seems a bit lagging.

However, if you think about it carefully, this is not hesitation on the part of the Federal Reserve, but rather an indication of their strong confidence in the economy itself. Why? First, the inflation pressure brought by tariffs is likely to be a one-time event and will not drag down the inflation trend in the long term. Second, from the key hard data of inflation indicators, the resilience of the US economy is still strong, unlike those indicators reflecting sentiment. In other words, while the market sentiment may be scared, the real economic situation is more stable than expected.

What Powell has been saying about waiting and seeing is actually encouraging the market to compare and wait for comprehensive data to gradually prove that soft data is overly pessimistic, or to wait for soft data to correct itself. This statement superficially appears to be “wait and see,” but the core meaning is actually: the Federal Reserve does not see real danger, so they are not in a hurry to act.

So, what does not cutting interest rates mean for the market?

First, it indicates that inflation is not out of control and the economy is not facing major problems; otherwise, the Federal Reserve would not dare to remain inactive.

Second, not cutting interest rates can maintain market confidence because it represents strong economic resilience and stable fundamentals.

Third, more importantly, the Federal Reserve still has a full 4.25 percentage points of interest rate space left. If risks do arise in the future, they can decisively step in to stabilize the market.

Therefore, from a long-term investment perspective, not cutting interest rates is actually the biggest support for the US stock market and cryptocurrency market. This is essentially telling everyone: the economy itself is not that bad, the Federal Reserve still has ammunition, and the market does not need to worry for now.

Not cutting interest rates is not because the Federal Reserve is inactive, but because the fundamentals are strong enough. From a long-term perspective, this is actually the best state for the US stock market and cryptocurrency market.

Make it clear, I am talking about the long-term perspective.