Recently, the Federal Reserve announced a rate cut, but you'll find that instead of rising, the market actually declined. There are several key reasons behind this.

First is the expectation gap. The Federal Reserve's dot plot shows that only one rate cut is expected next year, but the market had generally anticipated three. This huge discrepancy immediately dampened market enthusiasm, and the positive effects of the rate cut are significantly reduced. Secondly, the magnitude of this rate cut has also shrunk; compared to previous expectations, the current measures are clearly less aggressive.

But the most concerning point is the third—Powell is effectively raising the bar for future rate cuts. This is not a new move; he did the same last December, and as a result, the Federal Reserve paused its rate cuts. It took nine months before they started again, and naturally, the market feels uneasy about this. Will history repeat itself? This is the biggest question on traders’ minds right now.