Home > News list > Data >> Blockchain

The Fed Cuts Rates by 50 Basis Points, Bitcoin and Ethereum Surge

Blockchain 2024-09-19 09:17:36 Source:

The Fed Cuts Rates by 50 Basis Points, Bitcoin and Ethereum SurgeIn the early morning of September 19th, Beijing time, the Federal Reserve announced it would cut the target range for the federal funds rate by 50 basis points to 4.75% to 5%

The Fed Cuts Rates by 50 Basis Points, Bitcoin and Ethereum Surge

In the early morning of September 19th, Beijing time, the Federal Reserve announced it would cut the target range for the federal funds rate by 50 basis points to 4.75% to 5%. This marks the first rate cut since 2020 and the largest single rate reduction since the financial crisis of 2008.

What does the Fed's significant rate cut mean? Some analysts believe that historically, the Fed rarely reduces interest rates by 50 basis points when starting a new easing cycle unless facing a major economic crisis. This aggressive rate cut by the Fed, exceeding institutional expectations, may be an attempt to achieve a "soft landing" and mitigate the risk of economic activity "stalling."

The Fed's rate cut decision has sparked heated discussions in the market. Many economists point out that this signifies the Fed's growing concerns about the economic outlook. The US economy is currently facing multiple pressures, including persistent inflation, weak consumer spending, and slowing business investment. Lower interest rates aim to reduce borrowing costs and stimulate economic growth.

In market performance, Bitcoin and Ethereum, among other cryptocurrencies, surged in response to the rate cut announcement. As of 8:30 am on September 19th, Bitcoin was trading at $62,068, up 3.39% for the day; Ethereum was trading at $2,384, up 2.53% for the day.

The positive reaction of the cryptocurrency market to the rate cut news is primarily attributed to the fact that lower rates are beneficial for risk assets' valuation. Lower interest rates mean lower borrowing costs, attracting more capital inflows into risk assets, including cryptocurrencies. Additionally, the rate cut might also indicate a shift towards a looser monetary policy by the Fed, offering a more friendly environment for the cryptocurrency market.

However, it's crucial to note that the Fed's rate cut also carries certain risks. Lower interest rates could exacerbate inflation and potentially lead to asset bubbles. Therefore, investors should cautiously assess the impact of the rate cut on the cryptocurrency market and make investment decisions based on their individual risk tolerance.

In conclusion, the Fed's significant rate cut is a crucial step in addressing economic challenges. This move has had a positive impact on the cryptocurrency market, but it also carries some risks. Investors should closely monitor market fluctuations and make informed investment decisions.

Tag: The Fed Cuts Rates by Basis Points Bitcoin and


Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.

AdminSo

http://www.adminso.com

Copyright @ 2007~2025 All Rights Reserved.

Powered By AdminSo

Open your phone and scan the QR code on it to open the mobile version


Scan WeChat QR code

Follow us for more hot news

AdminSo Technical Support