Everyone is saying 'wait for the decision to act', but is this round of Federal Reserve interest rate cuts really an opportunity to receive cash or a trap? Don't rush, 30 years of historical data has already laid out the answer!

First, understand: interest rate cuts fall into 3 categories, with vastly different outcomes (the core that retail investors should remember)

The Federal Reserve's interest rate cuts have never been just 'cut and rise', historically there are 3 scenarios that directly determine asset fluctuations:

Where will we stand in 2025? More like 1995 'preventive' - unemployment rate at 4.1% is not high, GDP is still rising, inflation is falling, but there are two hidden worries: U.S. stocks have risen 20% to high levels, and U.S. debt accounts for 123% of GDP (far exceeding 2007).

1. Bitcoin: it won't surge 17 times, but it's likely to rise steadily.

The lessons from the last two rounds of interest rate cuts are very real:


  • In 2020, the 'panic-style interest rate cut' (directly cut to 0 + unlimited money printing): Bitcoin rose from 3800 dollars to 69,000 dollars, a rise of 17 times;

  • In 2019, a small interest rate cut (only 75 basis points): after the rate cut, it fell back to 7000 dollars because the monetary easing was too little.


What about now? Expected cumulative interest rate cuts of 100-150 basis points (between 2019 and 2020), plus the Bitcoin ETF has been established, and institutions have formal tools to enter the market, it is highly likely to be 'rational prosperity'—it won't explode, but after liquidity opens up, it will slowly rise, much more stable than in 2019.

2. U.S. stocks: don't chase blindly at high levels, sectors matter.

Don't think that interest rate cuts mean a bull market! When rates were cut in 2007, U.S. stocks were at a high and then collapsed; in 1995, rates were cut at a low and then surged.
Now the focus is on sectors:


  • If only 25 basis points are cut (most likely): financial, industrial, and other cyclical stocks may be more stable;

  • If the economy weakens: healthcare, essential consumer goods, and other defensive stocks will be more resilient;

  • Tech stocks have already risen 30%, don't chase the highs!

3. Gold: the most stable 'ballast', it will rise unless something unexpected happens.

Gold never disappoints those waiting for interest rate cuts: in the last 3 interest rate cut cycles, the average increase over 2 years was 32%, and there has never been a loss!
This time it's even more substantial: global central banks are scrambling for gold (1000 tons bought in 2024), plus 'de-dollarization' and geopolitical risks, gold's 'safe premium' is fully realized, conservative retail investors can treat it as a bottom position.

Finally, to be honest (don't panic, retail investors)

Don't get tangled up in 'whether it will rise on the day of the decision'—historically, the second half of the interest rate cut cycle is the main event: after the last two rate cuts in 1995, U.S. stocks rose 5 times, and Bitcoin didn't really take off until six months after the rate cuts in 2020.


What you should be doing now is not to guess the points blindly, but to think clearly: can you withstand the volatility? Do you want to make quick money or steady money?
Interest rate cuts are just the beginning of the 'faucet'; the real opportunities are behind, and staying alive is more important than anything.
Once the decision is made on the morning of the 18th, the direction will be clearer—be patient, the money from easing won't run away.

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