📊1. The Fed cut interest rates by 25 basis points as scheduled.

The Fed announced a 25 basis point rate cut at the September monetary policy meeting, lowering the federal funds rate target range to 4%-4.25%, in line with market expectations.
🌟Flying Fish Interpretation: Interest rate cut = borrowing money becomes cheaper, financing costs for businesses and individuals decrease, corporate pressure is slightly reduced, and investment may also increase, theoretically benefiting the stock market and crypto space.
🤔2. Powell's speech: Future path "uncertain" ➡️ Data dependence stronger
Fed Chairman Powell emphasized that subsequent policies depend on economic data, aiming to prevent both inflation rebound and hard landing of the economy.
🌟Flying Fish Interpretation: To put it simply: it’s now a "step-by-step approach"; interest rates may continue to be lowered in the future, but it will depend on the price levels and employment situation. No more advance commitments, just like driving while constantly monitoring the road conditions and adjusting speed accordingly.
📕Finance Mini Class
What does the Fed's interest rate cut really mean?
1. Definition: A rate cut = a reduction in the target federal funds rate, making it cheaper for banks to borrow money.
2. Transmission Path: Interest rate cut ➡️ Bank loan interest rates decrease ➡️ Corporate/individual financing costs decrease ➡️ Investment and consumption may increase.
3. Risk: If it is lowered too much or too quickly, it may lead to a resurgence of inflation.
💡A small metaphor:
Lowering interest rates is like giving the economy a "discount coupon".
➡️Borrowing money has become cheaper, companies are willing to expand production, and individuals are willing to spend; however, if the incentives are too large, it may lead to excessive purchasing, causing prices (inflation) to rise again.
🌟One sentence to conclude
Interest rate cuts realized = "expectations met"; future "uncertainty" = market wait-and-see. Understanding the big direction is more important than chasing short-term fluctuations: interest rate cut cycle = loose liquidity, which is long-term positive for the stock market and the crypto space.
#Fed resumes rate cut pace