Yesterday, the U.S. stock market experienced a significant drop, with the Nasdaq index plummeting 2.78% overnight. The seven major tech giants in the U.S. collectively fell, with Nvidia dropping over 8%. The cryptocurrency market also followed suit, with Bitcoin falling below $80,000, reaching a low of $79,532. So why did it drop so badly?
The fundamental reason is the market's panic over Trump's tariff policy. Yesterday, Trump reiterated that tariffs would be implemented on Mexico and Canada starting March 4. The market had previously anticipated April 2, leading to a wave of panic. Many people have begun to worry if Trump is intentionally creating a 'mini financial crisis,' publicly shouting about tariffs while subtly pushing down prices to pressure the Federal Reserve into accelerating monetary easing and taking action to save the market.
According to tools from the Chicago Mercantile Exchange, the market expects the Federal Reserve might start lowering interest rates in June, with another cut in September. In simple terms, everyone is betting that the Federal Reserve will lower rates at least twice this year.
So why hasn't the Federal Reserve lowered rates yet? Because the core inflation rate is still above the target, and inflationary pressures have not been effectively controlled. Currently, the economic data in the U.S. still appears strong. The goal of the Federal Reserve in lowering interest rates is to stimulate the recovery of the U.S. economy, not to serve the global economy.
Since taking office, Trump has introduced a series of policies, such as tariff policies and trade policies, leading to unstable market expectations. Therefore, the Federal Reserve becomes more cautious in making interest rate decisions.