What is the difference between a 25 basis points and a 50 basis points reduction?

📉 If the Fed lowers interest rates by 25 basis points (0.25%)

The US dollar: weakens slightly because the cut reduces the attractiveness of the dollar.

Gold and cryptocurrencies: tend to rise due to lower real yields. However, the rise is often limited and speculative.

US stocks: usually relax and rise because financing becomes cheaper, but the market may see it as a signal that the Fed is still cautious about inflation.

General mood: the market reads it as "support for growth" but not a radical change.

📉 If the Fed lowers interest rates by 50 basis points (0.50%)

Market impact: this is a larger cut than expected → considered a "dovish surprise."

The US dollar: weakens significantly because the yield difference becomes larger between it and other currencies.

Gold and Bitcoin: often see a strong and direct rise, as investors flee from the dollar towards alternative assets. It may be preceded by a drop for pricing if the market has not already priced it in.

Stocks: may initially jump strongly (happy about cheap financing), but some investors fear that this large cut is a sign of a deep economic problem.

General mood: markets consider it a major shift, and we may see very violent fluctuations between strong rises and corrections.

A 25 basis points cut = limited impact, markets consider it "expected."

A 50 basis points cut = a surprise, opens the door to strong fluctuations in all markets $BTC .