SoSoValue: Today, the market risk sentiment VIX index has climbed to its highest point since early August (when the Bank of Japan raised interest rates). The market may be overreacting, it is recommen

According to the macro sector display of SoSoValue, at the interest rate meeting on December 18th, the Federal Reserve cut interest rates by 25 basis points as scheduled, lowering the target range for federal funds rate to 4.25%-4.50%. Regarding next year's pace of rate cuts, the Fed adjusted its expectations from "four times" to "twice" through its latest dot plot chart. In addition, it raised its forecasts for future core PCE inflation and GDP growth rates which is consistent with Powell's remarks and all convey a more hawkish signal than market expectations. Data shows that today's market risk sentiment VIX index has climbed to its highest point since early August (when Bank of Japan hiked interest rates).

Analysts at SoSoValue stated that FOMC proposed an unexpected plan for cutting interest rates along with Powell’s “hawkish” remarks led to a shift in market sentiment towards panic; US bonds are even overreacting while U.S stock markets have corrected accordingly and dollar has appreciated significantly. Overall, all risky assets have strongly reacted to FOMC’s latest signals. Based on macroeconomic data analysis we believe that current fundamentals of US economy remain unchanged and dollar remains strong; consensus-strong assets like cryptocurrencies continue being destinations for capital inflow; every pullback brought about by market sentiment is a good entry point suggesting maintaining exposure currently.