A Perspective on the Upcoming Interest Rate Cut: Where Are the Real Signals?

At this time, the majority of the market is focused on the question: Will the Fed fall interest rates by 25 basis points or 50 basis points? At first glance, the fall in levels seems significant. But in reality, the nature of the issue does not lie in the numbers. After all, a fall of 50 basis points may not necessarily be absolute good news. Let's make an assumption: if the Fed is forced to fall sharply by 50 basis points, it could be interpreted by Wall Street as "the economy and job market are worse than expected, so the Fed has to use strong medicine." At that point, the narrative is no longer just about "the Fed supporting the market," but also reflects a gloomier picture of the underlying U.S. economy. In other words, the market does not follow the trend of falling interest rates, but rather the underlying economic picture behind that decision. The new economic data is the "celestial battle," while the interest rate cut is merely a pretext for all arguments to revolve around. The ultimate outcome of that battle will not change just because of 25 or 50 basis points. Lessons From 4 Previous Fall Cuts Looking back at history, in the last 4 times the Fed began a rate cut cycle, the US stock market followed a common scenario: Immediately after the announcement of the fall in interest rates, stock prices surged strongly – thanks to the optimistic sentiment and the quick reaction of capital flows. Afterwards, the market turned around for adjustments, sometimes falling slowly (âm thầm rơi – “drift down”), and sometimes plummeting sharply (sharp drop). The only common point: after the initial excitement passes, the market will fall. This means that, if according to the rules, in the next 2 weeks, it is highly likely that the US stock market will mainly adjust down. Contact the Cryptocurrency Market With the close connection between Wall Street and the crypto market today, the movements of the S&P 500 or Nasdaq almost instantly reflect on Bitcoin and altcoins. If U.S. stocks adjust, crypto is unlikely to go against the trend. But this is not necessarily bad. On the contrary, for long-term investors, a correction in the next 2 weeks could be an opportunity to scale down capital to buy in. The market is falling → asset prices are cheaper. The major bull market cycle is still maintained → adjustments become accumulation opportunities. Conclusion The important thing is not whether the Fed will cut by 25 or 50 basis points, but what the market will read from that message: Is the economy weakening or is it simply the Fed actively stimulating? In the short term, history shows that after a fall, U.S. stocks and crypto are likely to experience a correction. For vigilant investors, this is the golden opportunity to allocate capital and accumulate positions before entering the next big wave.