The Fed's "hawkish" rate cut drama has finally arrived.
Interest rates were cut by 25 basis points, bringing the policy rate to 4.25-4.5%.
But in the new economic projections, next year's economic forecast numbers were comprehensively revised upwards.
The policy rate expectations were directly lowered by 50 basis points, implying only two rate cuts next year (most likely ending by Q1).
Originally, the market thought that after Q1, rate cut decisions would enter a hard mode, but at least one more cut was still possible.
This guidance is effectively 25 basis points less than market expectations.
The stock market rally brought by Trump's election, from traditional industries to small-cap stocks, then back to the Nasdaq's catch-up rally, followed by the frenzy over newly launched large models and ASICs.
After this round of catch-up, the U.S. stock market is likely to consolidate, waiting for the next quarter's earnings.
