SoSoValue: Today, the market risk sentiment VIX index has risen to the highest level since early August, and the market may be overreacting. It is recommended to maintain risk exposure.

Odaily Planet Daily News According to SoSoValue’s macro zone, the Federal Reserve cut interest rates as scheduled by 25 basis points to a target range of 4.25%-4.50% at the December 18th interest rate meeting. Regarding the pace of rate cuts next year, the Fed adjusted its expectations from the previous ‘four rate cuts’ to ‘two rate cuts’ according to the latest dot plot. In addition, the Fed raised its expectations for future core PCE inflation and GDP growth, which is consistent with Powell’s remarks, conveying a more ‘hawkish’ signal than market expectations. In terms of data, the market risk sentiment VIX index rose to its highest level since early August (when the Bank of Japan raised interest rates) today. SoSoValue analysts believe that the FOMC’s unexpectedly aggressive interest rate cut plan, coupled with Powell’s hawkish remarks, has caused market sentiment to turn to panic. US Treasury bonds have even overreacted, leading to a pullback in the US stock market and a strong appreciation of the US dollar. Overall, all risk assets have reacted strongly to the latest signals from the FOMC. Based on macroeconomic data, we believe that the fundamentals of the US economy remain unchanged and the US dollar remains strong. Consensus-driven assets such as cryptocurrencies are still a destination for capital inflows. Each pullback caused by market sentiment in the game is a good buying opportunity. It is recommended to maintain current risk exposure.