US short-term interest rate futures traders reduced their bets on a Fed rate cut after the non-farm payroll data was released. Following the release of the non-farm payroll data, pricing in the swap market showed that the likelihood of a Fed rate cut in March has returned to 50%.

Iain Stealey, the Chief Investment Officer of International Fixed Income at Morgan Asset Management, stated that the market's expectation of a 150 basis point cut by the Federal Reserve this year is "not actually a lot" based on past interest rate cut cycles. Stealey noted that the Fed has already indicated its desire to ease policy, believing that current policy is restrictive and inflation is declining. "If the 10-year US Treasury yield falls to 3.5% in the first half of the year and drops to even lower levels in the second half, I would not be surprised," Stealey said. "It depends on the data, it depends on inflation continuing to evolve as the central bank expects, and if the job market shows signs of fatigue, it may go even lower."

The Federal Reserve's "dot plot" released on Wednesday shows central bankers expecting a 75 basis point cut in interest rates by 2024, a significant increase from the 25 basis points expected just three months ago. Traditional markets have responded positively to this news, with all three major US stock indices rising by over 1%, and the Dow Jones Industrial Average surpassing 37,000 for the first time ever. The bond market has also rallied, with the yield on two-year US Treasury bonds dropping by about 40 basis points to its lowest level since May. However, while markets are optimistic about rate cuts, the Fed's more modest expectations suggest that a significant economic slowdown and/or inflation would be necessary to justify such cuts.

Fed Chairman Powell: interest rate cuts have begun to come into view.

Federal Reserve Chairman Powell stated that we believe our policy interest rates have reached or are close to their peak. (Jinshi)

Fitch analyst Brian Coulton stated in a report that the Federal Reserve sent "a strong signal" that it believes "interest rates are nearing their peak". Previously, the Fed maintained high interest rates while stating that the economy is slowing down and lowered its forecast for interest rates in 2024.

Federal Reserve Chairman Powell stated that the reason for not waiting for a 2% inflation rate before cutting interest rates is that it would be too late and exceed the target. <br>

The Fed's dot plot hinted at a 75 basis point rate cut next year.

After the announcement of the Fed's decision to maintain interest rates unchanged, according to market data, Bitcoin rose by more than 0.55% in the short term, and Ethereum rose by more than 0.59% in the short term.

The Federal Reserve concluded its annual interest rate decision for 2023, deciding to keep the benchmark interest rate unchanged in the range of 5.25%-5.50%, as expected. In the eight decisions made this year, the Federal Reserve raised interest rates by 25 basis points four times and kept rates unchanged four times. <br>