4E: Fed Keeps Interest Rates Unchanged, Slows Balance Sheet Reduction to Release Liquidity, U.S. Stocks and Crypto Market Rally Together

On March 20th, the Federal Reserve made a decision to maintain the policy interest rate unchanged, which was in line with market expectations. Simultaneously, it announced a significant deceleration in the pace of balance sheet reduction (QT) in order to ease market liquidity pressures. Powell reassured investors that the risk of a recession is low, the U.S. economy remains strong, and the job market remains stable. According to 4E's monitoring, the Fed's dovish stance boosted risk assets. On Wednesday, all three major U.S. stock indexes showed an upward trend. The S&P 500 increased by 1.08%, the Dow rose by 0.92%, and the Nasdaq gained 1.41%. Tech stocks took the lead in the gains. Tesla rose by 4.68% and Nvidia increased by 1.81%. The crypto market witnessed a sharp rebound. Driven by tech stocks, Bitcoin continued its volatile rally and reached $87,453. Before writing, it slightly pulled back to $85,866, with a 3.6% increase in the past 24 hours. Other major cryptocurrencies also rose collectively. Ethereum rebounded above $2000, and XRP surged by more than 11% as the SEC dropped its appeal against Ripple. In the commodities market, the U.S. dollar index surged but quickly narrowed its gain after the Fed's announcement of no change, rising by 0.21%. U.S. oil increased by 0.39%. The spot gold price hit a new intraday high for the second consecutive day and approached $3052 during Powell's press conference. During the press conference, Powell acknowledged that Trump's economic policies have brought a high degree of uncertainty to the U.S. economy but reiterated that the Fed is not in a hurry to adjust its monetary policy. The updated dot plot shows that the Fed is expected to cut interest rates twice this year, which is in line with the forecast from December last year. At the same time, the Fed lowered its economic growth forecast in the latest projections while raising inflation expectations, indicating signs of "stagflation." eeee.com, as a financial trading platform supporting cryptocurrency, stock indices, commodities such as gold, and forex, recently launched a USDT stablecoin financial product with an annualized yield of 8%, providing investors with a potential hedging option. 4E reminds you to be aware of market volatility risks and make sensible asset allocations.