Recently, the market has increasingly expected that the US Federal Reserve may cut interest rates by 25 basis points. This expectation is mainly due to the slowdown in US economic growth, reduced inflationary pressure and rising uncertainty in the global economy. Investors and analysts are closely watching the Fed's policy trends to try to judge future interest rate trends.

### Reasons for rate cuts

First, the recovery of the US economy has been slower than expected, especially in the areas of consumption and investment. Although the job market remains solid, the high interest rate environment has already taken a toll on corporate borrowing and household consumption. As core inflation gradually recedes, the Fed may also be inclined to ease monetary policy to stimulate economic activity.

Second, the uncertainty of the international economic situation has also had an impact on the Fed's decision-making. Global geopolitical risks, tight supply chains and stagflation risks in some economies have brought external economic pressures to the United States.

Impact of rate cuts

If the Fed really implements a 25 basis point rate cut, the market may see the following changes:

1. **Stock market rebound**: Rate cuts usually boost the stock market because low interest rates help improve corporate profitability and reduce borrowing costs.

2. **Crypto market volatility**: Rate cuts may lead to a weaker dollar, which in turn stimulates demand for digital currencies such as Bitcoin. Investors may transfer funds from the fiat currency market to crypto assets in search of higher returns.

3. **Declining bond yields**: As interest rates fall, bond yields will fall further, which may lead investors to look for other high-yield assets.

4. **Global market chain reaction**: The Fed's interest rate cut policy will not only affect the US domestic market, but may also have a wide-ranging impact on global markets, especially emerging market economies. Lower US dollar interest rates may prompt central banks in other countries to follow suit.

Although the market generally believes that the Fed may take interest rate cuts, this still depends on economic data in the coming months. If inflation continues to fall and the economy performs weakly, the Fed may indeed choose to ease economic pressure by cutting interest rates. But at the same time, we must also be wary of the risks that may arise from interest rate cuts #美联储11月降息预期升温