FOMC turns dovish; US stocks and Bitcoin rise across the board due to prediction of multiple interest rate cuts next year | 14th Financial Tankan

12/14 (Thursday) morning market trends (compared to the previous day)

traditional finance

• NY Dow: 37,090 +1.4%
• Nasdaq: 14,733 +1.4%
• Nikkei average: 32,926 +0.2%
• USD/JPY: 142.8 -1.7%
• Gold futures: 2,042 +2.5%
• NVIDIA: $480.8 +0.9%
• Tesla: $239.2 +1%

Today’s US stock indexes continued to rise, with the NY Dow once again hitting its highest level since the beginning of the year. The surprise change in the US Federal Open Market Committee’s (FOMC) interest rate policy decision to a dovish one was seen as a factor.

At the FOMC meeting in the morning, it was unanimously decided to keep interest rates unchanged for the third consecutive meeting (5.25-5.5%). The rate hike cycle has ended, and the latest FOMC members’ interest rate outlook (dot plot) shows that the median interest rate forecast is 4.625%, with a total rate cut of 0.75% (three possible cuts) from the current rate of 5.25-5.5%. gender) is expected. Risk assets such as stocks, gold, and virtual currencies have appreciated the FOMC pivot and have risen in value.

The inflation rate is expected to slow to 2.4% next year, reaching the Federal Reserve’s target of 2% in 2026.

Key points of this FOMC statement and Chairman Powell’s remarks

• Economic activity growth slows from strong pace in 3Q; inflation eases but remains high
• This is the first time since March 2021, during the coronavirus pandemic, that the dot plot median forecast did not indicate an outlook for further interest rate hikes.
• Chairman: “We are not ruling out the option of further interest rate hikes, but interest rate cuts are starting to come into view.”

connection: Despite persistent CPI, U.S. stock indexes hit year-to-date highs

Today’s main market materials are as follows:.

• FOMC announcement: CPI (Consumer Price Index) as expected the previous day
• The rate of increase in the November U.S. producer price index (PPI) released in the morning slows down compared to the previous year.
• US Treasury Secretary Janet Yellen (former Fed Chair): “As inflation slows down, it is natural for the Fed to consider lowering interest rates to maintain a stable economy.”
• US Treasury yields plummet as FOMC turns dovish
• Dollar plunges to 142 yen level

connection: VanEck predicts the amount of capital inflow upon approval of Bitcoin spot ETF, taking into account gold ETF cases and economic environment

Important economic indicators/events from this week onwards

• 12/15 (Friday) 22:30 December New York Fed Manufacturing Industry Index
• 12/19 (Tuesday) Morning Bank of Japan Monetary Policy Decision Policy Interest Rate Announcement
• 12/19 (Tue) 15:30 Regular press conference by Bank of Japan Governor Kazuo Ueda
• 12/21 (Thursday) 22:30 U.S. quarterly real gross domestic product (GDP, final value)
• 12/22 (Fri) 22:30 US November personal consumption expenditure (PCE deflator)

connection: Is the virtual currency market, including Bitcoin weak, on a wait-and-see tone with the FOMC?

connection:Learn about Bitcoin ETFs from the beginning: Explaining the advantages and disadvantages of investing and how to buy US stocks

Virtual currency related stocks rise significantly

• Coinbase｜$150.4 (+7.7%)
• MicroStrategy | $586 (+5%)
• Marathon | $16.7 (+12.5%)
• Riot Platforms | $15.2 (+8.3%)

connection: Bitcoin market capitalization rises to 9th place, surpassing Tesla and Berkshire, approaching 1/16th of the gold market

Virtual currency market Bitcoin returns to $43,000 level

• Bitcoin: $43,196 +4.8%
• Ethereum: $2,270 +3.8%

connection: Solana’s breakthrough, market influence of blockchain technology driving 500% annual growth

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