The Federal Reserve cuts interest rates and buys short-term bonds, Powell leans dovish, U.S. stocks, short-term U.S. Treasuries, and gold rise, the dollar falls, Bitcoin fluctuates

On Wednesday, December 10 local time, the Federal Reserve announced its interest rate decision, lowering rates by 25 basis points as expected, and announced it would purchase $40 billion in government bonds over the next 30 days. Federal Reserve Chairman Jerome Powell's remarks at the press conference were more dovish than expected. U.S. stocks, short-term U.S. Treasury bonds, and gold rose during the session, the dollar fell, and Bitcoin fluctuated, briefly rising to $94,500 before significantly retreating.

Before the Federal Reserve Decision Announcement

Before the release of the Federal Reserve's December interest rate decision statement, U.S. stocks fluctuated, the dollar and gold fell, and U.S. Treasury yields declined during the day:

• The S&P 500 was roughly flat, the Dow Jones rose 0.34%, and the Nasdaq fell 0.37%, while the bank stock index rose 1.15%.
• The yield on the 10-year U.S. Treasury bond fell by 2.34 basis points to 4.1644%, stabilizing near the daily low of 4.1566%; the yield on the 2-year U.S. Treasury bond fell by 2.67 basis points to 3.5859%, stabilizing near the daily low of 3.5817%.
• The U.S. dollar index fell by 0.29% to 98.95 points. The dollar fell by 0.31% against the yen, the euro rose by 0.28% against the dollar, the pound rose by 0.32% against the dollar, and the Australian dollar was flat against the dollar.
• Spot gold fell by 0.29% to $4,195.92. Spot silver fell by 0.36% to $60.42.

After the Federal Reserve Decision Announcement

At 3:00 AM Beijing time, the Federal Reserve's December meeting lowered rates by 25 basis points as expected and announced it would purchase $40 billion in government bonds over the next 30 days. U.S. stocks and gold rose after some fluctuations, short-term U.S. Treasury yields fell briefly, and long-term U.S. Treasury yields fluctuated before rising:

• The S&P 500 index rose by 0.15%, the Dow Jones rose by 0.52%, and the Nasdaq fell by 0.22%.
• The yield on the 2-year U.S. Treasury bond briefly fell by 3 basis points, approaching 3.56% after the Federal Reserve's decision statement was released. The yield on the 10-year U.S. Treasury bond briefly fell by more than 2 basis points, refreshing the daily low to below 4.14%, but then rose again.
• Spot gold rose by more than $15 in the short term, overall turning upward, approaching the daily high of $4,218.85 refreshed at 10:43 AM Beijing time.
• Bitcoin refreshed its daily high above $93,200, then fell below $91,800, before rising again.

Powell's Press Conference

After the press conference began, Powell stated that the scale of U.S. Treasury purchases might remain at a high level in the coming months. Analysts believe that Powell's opening remarks at this press conference were more dovish than before.

Driven by Powell's comments on bond purchases, U.S. stocks expanded their gains during the session, refreshing their daily highs:

• The S&P 500 index rose by more than 0.6%, refreshing its daily high, the Dow Jones rose by 491 points with an increase of over 1%, the Nasdaq rose by 0.3%, the biotechnology index rose by 1.1%, the semiconductor index rose by 1.2%, and the bank index rose by 2.4%.
• U.S. Treasury yields fluctuated but showed an overall downward trend.
• Gold generally declined at the beginning of the press conference but then rose again.
• Bitcoin fluctuated during the press conference, rising in the latter half of the event.

Around 4:20 AM Beijing time, as the press conference concluded:

• The S&P 500's increase narrowed from 1.2% to 0.7%, the Dow Jones rose by 556 points with an increase of 1.1%, the Nasdaq rose by 0.4%, the semiconductor index rose by 1.4%, and the bank index rose by 2.7%.
• The yield on the two-year U.S. Treasury bond fell below 3.54%, hitting a daily low, down 7.5 basis points during the day; the yield on the ten-year U.S. Treasury bond fell about 5 basis points, refreshing the daily low to below 4.14%.
• The ICE U.S. Dollar Index fell more than 0.6%, refreshing the daily low to below 98.60 points. At 03:00 Beijing time, the Federal Reserve announced a 25 basis point rate cut, and before the monthly U.S. Treasury bond purchase plan, it slightly dipped, then briefly fell slightly lower. After the start of Powell's press conference, it rebounded slightly above 99. The Bloomberg Dollar Index fell more than 0.45%, refreshing the daily low to below 1209 points, with an intraday trading range of 1215.08-1208.86 points.
• Spot gold rose by 0.6%, refreshing the daily high, approaching $4239, and at 03:41 Beijing time, at the beginning of Powell's press conference, it refreshed the daily low, approaching $4182.
• As Powell's press conference was nearing its end, Bitcoin briefly rose towards $94,500, refreshing the daily high.

Major Asset Price Trends

The chart below shows the trend of the S&P 500 index:

The chart below shows the yield on the two-year U.S. Treasury bond:

The chart below shows the yield on the ten-year U.S. Treasury bond:

The chart below shows the trend of the U.S. dollar:

The chart below shows the trend of gold:

The chart below shows the trend of Bitcoin: