📉 Stocks & Traditional Markets
There are concerns that the monetary policy easing (rate cut) by The Fed could trigger an “everything rally,” which is a surge in prices across almost all asset classes, including stocks, bonds, precious metals, and crypto.
Signals that Powell could shift policy to be more dovish — or at least not aggressive — triggered a positive response from high-risk stock investors. Technology stocks and “growth” tend to receive fund inflows when hopes for low interest rates increase.
However, the interest rate policy remains a stumbling block. If inflation surges again or economic data shows overheating, The Fed could hinder the stock market's progress through policy tightening.
🔗 Crypto & Digital Assets
Ahead of Powell's speech and the release of FOMC minutes, the crypto market experienced high volatility. Investors are trying to read Powell's words as a signal for the next interest rate move.
The prices of Bitcoin and Ethereum saw corrections as the market awaited clarification on monetary policy.
In a broader context, lower interest rates tend to enhance the appeal of risky assets, including crypto. When interest rates are high, investors often shift to 'safe' instruments like bonds or savings.
There is also discussion among analysts about alternative assets — for example, some suggest allocating a small portion of the portfolio to Bitcoin or gold as a hedge against monetary policy uncertainty.
