Fed Launches New Rate Cut Cycle, Global Stock Market Risk Appetite Rebounds

Fed Enters Rate Cut Channel

In 2025, the Federal Reserve officially launched a new round of monetary policy easing. Cumulative rate cuts have reached 75 basis points, bringing the federal funds rate to the 4.25%-4.5% range. Chair Powell indicated that declining inflation and a cooling labor market provide policy space for rate cuts.

NASDAQ Hits Record Highs

Driven by rate cut expectations, the tech-heavy NASDAQ Composite broke through historical highs. NVIDIA, Microsoft, Apple and other large-cap tech stocks continued to strengthen, propelling NASDAQ to over 20% gains year-to-date.

Emerging Market Capital Inflows Accelerate

Fed rate cuts are driving global capital flows from dollar assets back to emerging markets. Southeast Asian, Latin American and Indian stock markets have received significant cross-border inflows.