#DOGS The Fed announced a 25 basis point rate cut, which is completely in line with market expectations. This is the first rate cut since Trump returned to the White House, and the market had already anticipated this; the previous continuous rise of US stocks was a clear signal.

However, after the announcement of this highly anticipated decision, the market reacted surprisingly calmly, with tech stocks even experiencing a slight pullback. Why is the market so composed? The main reason is that the Fed did not signal more easing. Powell clearly stated that this rate cut is more about 'risk management' considerations and does not indicate the start of a large-scale easing cycle.
Although the job market appears somewhat weak, the unemployment rate remains at a low level, while there are signs of rising inflation. The Fed is seeking a balance between controlling inflation and maintaining employment, without providing clear guidance on future policies.
But the market seems to be unable to wait any longer. The desire for interest rate cuts is almost reminiscent of the feelings people had a few years ago when they were looking forward to the lifting of lockdowns—willing to coexist with inflation, but first needing to gain liquidity. As long as inflation does not spiral out of control, it seems that no one cares whether the Fed's target is truly achieved.
This sentiment also affected the internal dynamics of the Fed. In the 12 votes for the interest rate cut decision, 11 votes were in favor, indicating a high level of consensus, which may also be influenced by political pressure.
Despite the calm market reaction, this interest rate cut decision is still worth noting. It not only reflects the Fed's assessment of the economic situation but also hints at the complexity of future monetary policy directions. Investors and economists will continue to closely monitor the Fed's subsequent actions and the potential impact of these decisions on the global economy.