In the early hours of September 18, 2025, the U.S. Federal Reserve made a significant decision: to lower the benchmark Intrerest Rate by 25 basis points, bringing it to a range of 4.00%-4.25%. This marks the first interest rate cut implemented by the Federal Reserve this year, and although the magnitude is not large, its impact is profound.

The background of this interest rate cut is the multiple pressures facing the U.S. economy. The job market is gradually cooling, inflationary pressures have eased, and the government's fiscal burden is becoming increasingly heavy. The Federal Reserve's move can be seen as a form of 'preventive' monetary easing policy aimed at supporting the economy.

Looking back, similar monetary policies often trigger significant market reactions. The interest rate cuts and quantitative easing policies of 2008 initiated a decade-long bull market, while the zero interest rate policy in 2020 spurred the surge of Bitcoin and the rebound of the US stock market. Therefore, this rate cut is likely to trigger a new round of global capital flows.

For ordinary investors, this policy change may bring new investment opportunities. Areas worth paying attention to include gold ETFs, overseas bond funds, A-share broad index funds, and 'fixed income +' products. However, investors should also be wary of potential risks, such as a rebound in inflation or changes in the Federal Reserve's interest rate cut pace that could lead to market reversals.

The market expects that the Federal Reserve will continue to implement interest rate cuts in the future. It is anticipated that by the end of 2025, the interest rate could be further reduced by 70 basis points, and by the end of 2026, it may decrease by 140 basis points. There could be 2 to 3 rate cuts next year. However, political factors may influence this process.

The recent interest rate cut has had a broad impact on global financial markets. The US dollar may face pressure, which could create conditions for the appreciation of the Renminbi, while also expanding the operational space for China’s monetary policy. Gold, as a traditional safe-haven asset, may benefit, while the stock market, particularly growth stocks and technology stocks, may perform positively in the short term. The bond market will also adjust accordingly, with short-term US Treasury yields expected to decline more rapidly.

Overall, this 25 basis point rate cut marks the beginning of a new round of monetary easing. It provides a certain buffer for the market, while also indicating that the global financial market is about to enter a new stage of development. Investors should closely monitor subsequent developments and adjust their investment strategies in a timely manner.