US Federal Reserve(Fed’s) latest interest rate cut and economic projections had a shocking effect on the market. Although the Fed’s 25 basis point interest rate cut decision was expected by the market, the reduction in the number of interest rate cuts expected for 2025 due to the resistance in inflation caused sharp price movements. This situation turned into a general sales wave in risky assets and large losses were recorded in the markets on a daily basis.
Global Markets and Cryptocurrency Market Hit Hard
After the Fed’s statements Nasdaq 3.56 percent, S&P 500 It fell by 2.95 percent. The cryptocurrency market was also affected by this sharp decline. Bitcoin (BTC) $94,806.6 While it decreased by over 7 percent to 94 thousand 780 dollars altcoin There was also a loss of 20 percent or more in value in the market. A total of hundreds of millions of dollars of long positions were liquidated during the day.
Analysts point out that the main reason behind this decline is that the markets are in an overly optimistic position rather than the Fed’s interest rate decision. The one-way and rapid rise of risky assets after the election made the markets sensitive to shocks.
Fed’s Forward Projections Raise Concerns
The Fed’s interest rate projections for 2025 were below market expectations. The market, which had previously expected 3 interest rate cuts, panicked when it saw 2 cuts in the new projections. The resilient course of inflation led the Fed to be more cautious in its policy decisions. This situation negatively affected investors’ future risk perception.
As volatility increases in the cryptocurrency market, many investors point out the instability of the market and warn about it. Experts emphasize that a careful strategy should be determined and prepared for shocks in such periods. US Presidential electionsIt is stated that the market needs a new balance level in order to balance the one-sided movements that occurred after the
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
