The Federal Reserve's interest rate cuts have quickly triggered a global market response. The US dollar index has fallen below a key threshold, and US stocks have seen a short-term rally (Dow Jones up over 1%), and this is just the beginning. The subsequent impacts will focus on three dimensions:

1. Opening of global central bank easing space: The continuous rate cuts by the Federal Reserve have narrowed the US-China interest rate differential, alleviating capital outflow pressures in emerging markets, and providing more monetary policy flexibility for Asian central banks and others. Market expectations suggest that the People's Bank of China may follow suit with moderate easing, and the RMB exchange rate is expected to benefit from the narrowing interest rate gap, with a significant increase in the likelihood of breaking 7 by 2026, thereby attracting foreign capital inflows into RMB assets.
2. Adjustment of traditional asset allocation logic: For ordinary investors, it is necessary to strengthen asset diversification during the rate-cut cycle. Among equities, reasonably valued A-shares, Hong Kong stocks, and emerging market assets are becoming more attractive. The tech growth and high-dividend value sectors should be prioritized; regarding safe-haven assets, in the context of a weakening dollar, gold serves as a hedge against currency depreciation, with moderate allocation recommended via gold ETFs and similar instruments (accounting for 5%-10%). US dollar assets should shorten durations, prioritize short-term high-yield deposits, and avoid long-term exchange rate depreciation risks.
3. The crypto market welcomes mild positive signals but must remain cautious of expectations: Historically, liquidity easing and risk appetite revival caused by Fed rate cuts are mildly bullish for crypto assets—during the first rate cut in September, Bitcoin and Ethereum briefly rebounded; a weaker dollar also indirectly enhances crypto attractiveness. However, analysts warn that this rate cut has been fully anticipated by the market, and a simple rate adjustment is unlikely to trigger a significant rally. The real key lies in Federal Reserve Chair Powell’s subsequent statements: if he signals dovishness (such as hinting at continued easing space or mentioning liquidity injections via reserve management bond purchases), it could further boost market sentiment; if he adopts a hawkish stance, volatility may ensue.
Additionally, the Fed plans to restart short-term Treasury purchases from December 12 (buying about $40 billion within 30 days), which, as a “quasi-QE” operation, will inject liquidity and potentially support the crypto market.
This year-end rate cut sets two major foreshadowings for the 2026 market outlook, requiring close attention:
First, the Federal Reserve’s policy pace—whether rate hikes pause in January and whether they resume in March—will directly determine the extent of liquidity easing throughout the year;
Second, the impact of the leadership change at the Fed—if Powell steps down, the new chair’s policy preferences could alter the rate cut pace in the second half of the year.
For the crypto market, the combined effects of liquidity and regulatory policies are crucial: if the Fed maintains a mild easing stance into 2026 and the US crypto regulatory framework (such as the Clarity Act, GENIUS Act) gradually takes effect, a “liquidity + certainty” double benefit could form, encouraging further institutional inflows; conversely, if rate cuts fall short of expectations or regulation tightens, the market may revert to volatility.
Overall, the Fed’s year-end rate cut in 2025 is a “just right” ending operation—hedging economic risks through easing while guiding market expectations with hawkish signals to prevent excessive optimism. For all market participants, the focus should shift from “whether to cut rates” to “the pace of easing” and “the effectiveness of liquidity implementation.” As global monetary policies gradually enter an easing cycle, the market opportunities in 2026 will largely revolve around assets benefiting from improved liquidity. Whether in traditional finance or crypto, proactively grasping policy rhythms and maintaining diversified allocations are core strategies for managing volatility.