1. Just now, the Federal Reserve announced a 25 basis point rate cut, lowering the federal funds rate to between 4.00% and 4.25%. This is the first rate cut by the Federal Reserve in nine months and the first since Trump's "second term". After the rate cut announcement, the offshore RMB to USD exchange rate was reported at 7.0845, New York gold was at $3744/ounce, U.S. stocks slightly rose, and the dollar index was at 96.22. The yield on the U.S. 10-year Treasury bond fell below 4%. 2. The extent of this rate cut meets expectations and carries no surprises. However, it signifies a turning point: over the next year to year and a half, the Federal Reserve will not only continue to cut rates but will do so aggressively. The high interest rates in the U.S. since the "pandemic - monetary point shaving" will gradually return to normal, ushering in a low-interest rate era. 3. Why did the Federal Reserve cut rates at this time? Because U.S. employment data is not ideal, with the unemployment rate rebounding to 4.3%. Although the inflation rate has not yet fallen below 2%, they decided to cut rates to prevent the economy from falling further. 4. Trump, coming from a real estate background, naturally favors low interest rates. Currently, U.S. interest rates are at historical highs, with a 30-year mortgage rate reaching 6.3% (around 3% in China), which hinders economic vitality. The current high rates in the U.S. are related to the high inflation brought about by the large monetary point shaving after the pandemic. The Federal Reserve paused rate cuts for nine months to observe whether Trump's tariff policies would stimulate inflation. 5. In the near future, U.S. interest rates will gradually fall back to pre-pandemic levels. According to Trump's vision, the U.S. benchmark interest rate should quickly drop below 2%. The midterm elections will be held in November next year, and Trump is eager to showcase achievements for the Republican Party to win the elections. It often takes about a year for rate cuts to take effect, so he has been pressuring the Federal Reserve to cut rates. 6. The Federal Reserve has restarted rate cuts and may accelerate the pace, which is favorable for global asset prices. This is also a medium- to long-term benefit for U.S. stocks, encryption currencies, and gold. It is expected that within this year, the Federal Reserve will have at least one more 25 basis point rate cut, but it is more likely to be two cuts of 25 basis points each. The Federal Reserve has two more meetings this year, one from October 28-29 and another from December 9-10 (both Washington time). 7. After the Federal Reserve's significant rate cuts, the rate inversion between China and the U.S. will be alleviated, and China's monetary policy space will also increase. This month, China's LPR rate will be announced next Monday (September 22), and a reduction of 10 to 15 basis points is possible. Due to the current cool property market, it is highly likely that we will cut rates. Even if we don't cut this month, there will be a rate cut in October. Before the LPR is cut, the central bank will lower the 7-day reverse repo rate to signal a rate cut. 8. The Hong Kong dollar is pegged to the U.S. dollar, so the rate cut for the Hong Kong dollar will keep pace with the U.S. dollar; the RMB, due to the rate inversion, will have a smaller rate cut than the U.S. dollar in the future. The asynchronous rate cuts of the RMB, U.S. dollar, and Hong Kong dollar will help retain funds in the mainland. In recent times, due to significant differences in deposit rates, many people have exchanged currency to deposit in Hong Kong. This will decrease in the future. 9. The Federal Reserve's rate cuts are also favorable for the Chinese stock market, property market, and economy. Among them, the greater rate cut for the Hong Kong dollar compared to the RMB means that the benefits for the Hong Kong stock market and property market are more pronounced. 10. In the near future, the pace of U.S. dollar rate cuts will be faster than that of the RMB, so the RMB to USD exchange rate is entering a period of gradual appreciation, and trade negotiations will strengthen this trend. Within this year, the RMB to USD exchange rate may return to below 7, with more appreciation space next year. The important premise for appreciation is that both sides reach a trade agreement; otherwise, it will be a different story. #BTC战略储备市场影响 #美联储降息预期升温