2026-01-07 03:25:27

The easing signals released by the Federal Reserve are activating the entire financial market. Last night, several Federal Reserve officials spoke consecutively, directly indicating the possibility of rate cuts, which immediately triggered a surge in the US stock market— the Dow Jones Industrial Average and the S&P 500 both hit new record closing highs, with the Nasdaq rising nearly 0.7%. However, in this rally, Chinese concept stocks clearly lagged behind, with the Nasdaq Golden Dragon China Index falling 0.78%, and some popular stocks dropping more than 6%.

Key information came very quickly. Fed Governor Michelle Bowman made a significant statement, saying that the rate cut this year could exceed 100 basis points, as core inflation has approached the official target. Subsequently, Fed official Barkin also hinted that policy needs "fine-tuning," balancing price stability with employment protection. This kind of statement triggered a re-pricing of the market’s expectations for a dovish cycle.

The probability data from the CME FedWatch tool clearly illustrate the situation. The chance of a rate cut in January is only 18.3%, while the probability of holding rates steady is as high as 81.7%, indicating no movement in the near term. Looking further ahead, by March, the probability of a 25 basis point rate cut rises to 40.7%, tying with the 52.8% chance of holding rates steady. Based on the current interest rate level of 3.50%-3.75%, the market generally expects two rate cuts this year, with the end-of-year rate potentially returning to the 3.00%-3.25% range.

Market reactions were almost instantaneous. US stocks continued to ferment, with liquidity expectations pushing risk assets higher. The crypto market also started to stir—main cryptocurrencies like BTC, ETH, and BNB rebounded on the trend, as funds began seeking entry opportunities. Gold and silver also opened higher this morning, reflecting safe-haven demand and indicating that the dovish outlook has taken root in people's minds.

Rate cuts haven't fully materialized yet, but expectations are already reshaping the market landscape. How far this liquidity-driven rally can go depends on the Fed’s actual subsequent actions.

BTC1,21%

ETH-0,12%

BNB-0,31%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

11 Likes

Reward
11
8
Repost
Share

Comment

0/400

HashRateHermit

· 01-10 00:33

Chinese concept stocks got stabbed in the back again, so ridiculous --- As soon as the rate cut expectation emerged, BTC took off. The pace is too fast --- Wait, will there really be a rate cut in March? Feels like another round of chopping the leeks --- Gold and silver are following suit. Is liquidity really coming? --- The Federal Reserve's mouth is top-notch, but what about actual actions? --- Can the crypto market's rebound this time hold up? Feeling a bit虚 --- Chinese concept stocks are down six points. What are they doing? --- The expected pricing is done, is there still a show later? --- Two rate cuts by the end of the year to reach 3 points, doesn't sound that unreasonable --- Here we go again, just talking without cutting, waiting and seeing

View OriginalReply0

DecentralizedElder

· 01-09 19:11

Chinese concept stocks are being penalized again, while US stocks are soaring. The gap... is truly incredible.

View OriginalReply0

just_another_fish

· 01-07 03:55

What’s going on with Chinese concept stocks? Everyone else is rising while we’re falling? --- The expectation of interest rate cuts triggered instant excitement in the crypto circle. We've seen this routine a few times, still gets me hyped. --- Wait, will there really be a rate cut or is this just another smoke screen? --- The Federal Reserve is playing it so smoothly. Expectations are high, the market peaks. If they don’t actually cut, I wonder how it will end. --- Liquidity is flowing in, funds are piling into BTC. Is it too late to jump on now? --- Why are Chinese concept stocks so weak? When will they pick up? --- 100 basis points? As soon as that word came out, the market went crazy. We’ll have to wait until March for the real deal. --- Gold and silver are rising too. That’s true safe-haven assets. --- It’s another case of expectations being reshaped. When it actually happens, it might be a whole different story.

View OriginalReply0

YieldWhisperer

· 01-07 03:55

Chinese concept stocks are hit again, can the Federal Reserve's一句话 determine their fate? --- Expectations of rate cuts are being hyped up, but the actual funds haven't arrived yet. Honestly, no one dares to guarantee how long this rally can last. --- Wait, if there's no rate cut in January and only in March? How are we supposed to survive these three months? Even air coins are rebounding. --- US stocks hit a new high with a decline of over 6%, the gap is incredible... Does anyone still believe in this year's prospects? --- When liquidity loosens, BTC also becomes volatile. Truly a community of shared destiny, haha. --- So should we buy the dip now or wait and see? This position feels a bit risky. --- The expectation of easing has taken root, but the policy shift still depends on further developments. In the short term, it might just be an emotional rebound.

View OriginalReply0

LightningHarvester

· 01-07 03:47

When the Federal Reserve speaks, Chinese concept stocks fall behind, this logic is really brilliant. Wait, has BTC rebounded? Why didn't I see it? Expectations of rate cuts are so strong, but it still feels like a harvest festival for the leeks. Chinese concept stocks fell over 6%, who can withstand this? Liquidity pushing up risk assets, in simple terms, it's just flooding the market, old routine. Expectations reshape the pattern, but can it really be implemented halfway? I remain skeptical. Want to stabilize prices and ensure employment at the same time, the Federal Reserve is dreaming too big. BTC rebounded on the trend, but I think it's just an excuse to rebound; funds have already run away. 100 basis points? Bragging, really daring to cut that much? It looks quite lively, but I still feel there are traps waiting.

View OriginalReply0

CryingOldWallet

· 01-07 03:42

Chinese concept stocks get slapped in the face again, really speechless --- Expectations of rate cuts are all being hyped up, why isn't Bitcoin soaring? --- Where are the promised 100 basis points? Feels like it's going to be postponed again --- The Federal Reserve keeps signaling daily, will they really cut or not? --- Liquidity is here, but why does it still feel cold on our side? --- Gold and silver are rising, the crypto world is also excited, but Chinese concept stocks don't deserve it, right? --- Reshaping expectations? I think it's expectation disillusionment --- Wait until March, then we'll probably clash again --- US stocks hit new highs, while our market has fallen over 6%, the gap is really huge --- The easing cycle is coming, everyone, are you ready to take the plunge? --- A 100bp rate cut, just listen and don't take it seriously --- BTC rebounded but still feels fake, waiting for real gold and silver --- I just love this expectation-driven market, easy to harvest the leeks

View OriginalReply0

ChainWatcher

· 01-07 03:41

Chinese concept stocks are getting hammered again, truly unbelievable.

View OriginalReply0

ProveMyZK

· 01-07 03:36

Chinese concept stocks are really incredible; while the US stock market hits new highs, we're just falling... Wait, if there's really a rate cut, can the crypto circle take off? The rate cut expectations are being pushed so high; the actual actions must be quite aggressive. The Fed is talking big again; let's wait and see in March. Is this rebound in BTC reliable? It feels like an illusory prosperity. The US stock market is soaring, and we're just getting chopped up, players feel sad. Around 3 points by the end of the year? Then what room for interest rate spreads to grow? CME data doesn't look very optimistic; no movement in January. It feels like everyone is just speculating on expectations; the real money hasn't come in yet. Chinese concept stocks are dying a very ugly death; why are they so resistant to falling?

View OriginalReply0