The Fed cut interest rates by 50 basis points, causing short-term spikes in US stocks, US bonds, and gold, as the US dollar fell and the trend reversed after a huge earthquake.

On Wednesday Eastern Time, the highly anticipated Federal Reserve September interest rate decision was announced. The Federal Reserve ultimately chose a more dovish and aggressive 50 basis point rate cut. Major assets saw significant fluctuations after the Federal Reserve statement was released in September. Before the Federal Reserve Rate Statement On Wednesday afternoon, just after 1:50 PM Eastern Time, the market was waiting for the Federal Reserve to announce the first rate cut of this easing cycle. Before the Federal Reserve decision statement was released, US stocks were roughly flat, US bond yields rose during the day, gold fell during the day, and the US dollar index fell slightly: The S&P 500, Dow Jones, and Nasdaq were roughly flat, the Philadelphia Semiconductor Index fell 0.1%, and the Philadelphia Banking Index rose over 0.1%. The yield on the 10-year US Treasury rose by 3.4 basis points, to 3.68%. The yield on the 2-year US Treasury rose by 3.7 basis points, to 3.64%. Spot gold fell, dropping below $2570. The ICE US Dollar Index fell by 0.06%, to 100.830 points. After the Federal Reserve Rate Statement At 2:00 PM Eastern Time, the Federal Reserve announced the September interest rate decision, declaring a 50 basis point rate cut. The dot plot shows that the Federal Reserve expects to cut rates by another 50 basis points this year, but the situation is more tense: 10 officials expect a cut of 100 basis points or more by 2024, while 9 officials expect a cut of 75 basis points or lower by 2024. In addition, for the first time since 2005, a member dissented from the Federal Reserve's rate cut decision, with Governor Bowman wishing for only a 25 basis point cut. The Federal Reserve's 50 basis point rate cut caused a significant short-term reaction in the market just after 2:00 PM Eastern Time, with US stocks and gold surging, US bond yields plunging, and the US dollar falling: US stocks surged in the short term, with the S&P 500 rising to about 1% intraday, the Dow rising by about 375 points, and the Nasdaq 100 rising over 1.1%. The yield on the 10-year US Treasury fell from above 3.69% to below 3.64%, turning lower intraday. The yield on the 2-year US Treasury fell from above 3.64% to below 3.54%. Gold prices rose by about $20 in the short term, reaching $2587.57 per ounce, approaching the historical high of $2589.70 set on September 16th. Spot gold continued to rise, surpassing the $2590 per ounce level, reaching a historical high, with a intraday increase of over 0.7%. The US Dollar Index fell by 40 points. The British pound rose to 1.3287 against the US dollar, reaching a new high since March 2022. However, approximately 13 minutes after the statement was released, US stocks nearly gave back all the gains made after the statement, the drop in US bond yields narrowed significantly, the US dollar rebounded from the intraday low shortly after the statement was released, and gold broadly maintained its strength. Some analysts mentioned that the larger rate cut has raised questions about the health of the US economy. Subsequently, until Federal Reserve Chairman Powell's press conference began, the trends of major assets, mainly stocks, bonds, gold, and the US dollar, reversed again, as they continued the trends seen immediately after the rate statement was released, with stocks, bonds rising, and the US dollar falling. After Powell's Press conference After Powell's press conference began, US stocks rose; spot gold rose above $2600, hitting a historical high; the ICE US Dollar Index fell by over 0.5%, hitting a daily low of 100.307 points; the offshore yuan rose above 7.07, hitting a daily high, rising by about 400 points, with an increase of over 0.5%. Traders increased their bets on the extent of easing. The yield on the 2-year US Treasury, which is sensitive to monetary policy, briefly fell by 7 basis points to 3.53%. Traders bet that by the end of 2024, the Federal Reserve will cut rates by about 123 basis points, higher than the approximately 112 basis points before the decision was announced. During the press conference, the trends of major assets reversed: The three major US stock indices fluctuated significantly. During the press conference, they briefly gave back all the intraday gains and turned lower, then rose again, but ultimately all three indices ended lower by the end of the day, about 40 minutes after the press conference ended. The yield on the 2-year US Treasury remained flat at around 3.6%, hitting a daily low of 3.5377% when the rate was announced, down from the daily high of 3.6590% earlier in the trading session. Spot gold rose and then fell back, hitting a daily low of $2553.50 after the press conference, significantly lower than the historical high of $2600.16 reached earlier in the press conference. The ICE US Dollar Index rose back above 100.8, narrowing its overall decline to less than 0.1%, hitting a daily low of 100.215 when Powell began the press conference. Trends of Major Assets The following images show the full-day trends of US stocks, the 10-year US Treasury, gold, and the US dollar: This article is sourced from "Wall Street See", translated by GMTEight and edited by Li Fo.