A 25 bp rate cut to 4.25% was expected, but the forecast for further cuts came as a surprise: now two cuts are expected by the end of 2024 (instead of one) and one in 2026.
Reason for the shift: fears of a slowdown in the labor market outweighed the risks from inflation (2.9% in August).
Market reaction:
The dollar collapsed (DXY continues to decline).
The euro strengthened to $1.19 (a four-year high), and the pound to $1.37.
Stocks and Bitcoin corrected (-0.7% Nasdaq, -1.2% BTC), with players taking profits.
Gold is holding near $3700 (a record high), taking advantage of the weakness of the USD.
Bottom line: The Fed chose to support employment, risking inflation. In the long term, this will support risk assets and commodities, but in the short term, markets have taken a pause.
#BNBBreaks1000 #BinanceHODLerBARD #FedRateCut25bps $ETH $XRP #BNBChainEcosystemRally #BinanceHODLerAVNT $BTC
