Currently, it has been discovered that there is a closed-door meeting to discuss the Federal Reserve's discount rate and bank prepayment.

The discount rate is a change made during significant financial issues, while prepayment is an emergency loan and short-term liquidity loan provided through the discount window when banks face financial problems.

Historically, what happened in such meetings:

(1) During the 2008 financial crisis

October 2008 closed-door meeting: The Federal Reserve urgently lowered the discount rate by 50 basis points and expanded the collateral range to alleviate the banking liquidity crisis, briefly boosting market confidence.

Effect: Although the long-term bear market did not change, bank stocks rebounded in the short term.

(2) Impact of COVID-19 in March 2020

March 15th emergency closed-door meeting: The Federal Reserve lowered the discount rate from 1.75% to 0.25% and initiated quantitative easing (QE), leading to a rebound in the U.S. stock market after a sharp decline.

Effect: The S&P 500 rose by approximately 30% in the following month.

(3) Before the September 2024 interest rate meeting

Market 'Pre-FOMC Drift' phenomenon: Historical data shows that stock and bond markets have a high probability of rising during the week of the Federal Reserve meeting (e.g., a surge in U.S. stocks before the September 2024 meeting).

Reason: Investors are betting on dovish signals or policy support.

The possible impact of the closed-door meeting on April 7, 2025:

Current meeting background:

Stock market crash pressure: Trump's tariff policy has caused market turmoil, and the swap market has priced in five interest rate cuts within the year, with expectations of an emergency rate cut next week.

Potential positive scenarios:

If the Federal Reserve lowers the discount rate or releases easing signals, it may drive a short-term rebound in U.S. stocks.

If the situation remains unchanged, the market may fluctuate due to unmet expectations.