Global risk sentiment has improved markedly in recent days, driven by the Federal Reserve’s decision to lower interest rates, which has injected fresh optimism into financial markets worldwide. Investors appear to view this move as a signal that policymakers are prioritising economic growth amid signs of a cooling labour market, even as inflation remains somewhat elevated. The cut has ripple effects across asset classes, from equities to commodities and cryptocurrencies, fostering an environment where risk-taking feels more rewarded. In this context, Wall Street has pushed to new heights, while emerging trends in digital assets suggest a sector on the cusp of broader institutional acceptance.
The Federal Reserve announced a 25 basis point reduction in its benchmark rate on September 17, bringing it down from previous levels and marking the first easing since late last year. This adjustment aims to support hiring and prevent a sharper slowdown in employment, as recent data showed initial jobless claims dropping significantly to 231,000 for the week ending September 13, the largest decline in nearly four years. Officials emphasised that the move addresses risks to the job market while keeping an eye on inflation, which ticked up slightly to 2.9 per cent in August but remains within a manageable range. Markets had largely anticipated this step, with probabilities exceeding 75 per cent leading up to the announcement, though some volatility ensued as traders digested the forward guidance indicating potential for two more cuts by year-end.
In contrast, the Bank of England opted to hold its key rate steady at four per cent on September 18, citing persistent inflationary pressures alongside uncertainties in growth and the jobs landscape. The Monetary Policy Committee voted 7-2 to maintain the status quo, with members expressing caution that the UK economy is not yet out of the woods on price stability. Looking ahead, the Bank of Japan is set to reveal its policy stance today, with expectations leaning toward no change from the current 0.5 per cent short-term rate, as officials navigate tariff risks and a potential US slowdown. These divergent approaches among major central banks highlight a global economy at a crossroads, where easing in one region could spill over to influence others.
Equity markets have responded positively overall, with US indices scaling fresh peaks on September 18. The Dow Jones Industrial Average climbed 0.27 per cent to close above 46,000, the S&P 500 advanced 0.48 per cent to around 6,600, and the Nasdaq Composite surged 0.94 per cent to over 22,200, buoyed by strength in technology shares. This rally reflects investor confidence that lower borrowing costs will sustain corporate earnings and consumer spending. Yields on US Treasuries moved higher in response to the robust jobless claims figure, which eased fears of a rapid labour market deterioration. The 10-year Treasury note rose three basis points to above 4.11 per cent, while the 2-year yield increased two basis points to 3.56 per cent. Such movements suggest markets are pricing in a soft landing rather than a recession, though the bond market’s reaction also underscores ongoing sensitivity to economic data.
Currency and commodity dynamics have shifted as well. The US dollar index strengthened by 0.49 per cent to 97.35, benefiting from the perception of relative US economic resilience amid global uncertainties. Gold prices dipped 0.4 per cent to US$3,643.40 per ounce, as profit-taking followed a recent record high, with the metal’s appeal dimming slightly in a risk-on environment. Brent crude oil fell 0.9 per cent to US$67.32 per barrel, pressured by concerns over US demand despite the rate cut’s potential to stimulate activity. These declines illustrate how commodities are caught between supportive monetary policy and lingering worries about global growth, particularly with trade tensions simmering.
Asian equities displayed a mixed performance, trimming some gains post the Fed’s meeting but still showing resilience in key benchmarks. Japan’s Nikkei 225 crossed the 45,000 threshold for the first time, closing higher amid a tech-led advance, reflecting spillover optimism from US markets. Early trading today saw varied movements across the region, with US futures pointing to a positive open, suggesting the upbeat sentiment may persist. This regional response highlights the increasing interconnectedness of global markets, with policy shifts in the US often setting the tone for Asia’s trading sessions.
Cryptocurrencies, on the other hand, have shown remarkable vigour, with Bitcoin maintaining momentum around US$117,000 despite initial sluggishness following the rate cut. Technical indicators point to a bullish setup, with a trend line support at US$115,800 and recent breaks above resistances at US$116,200 and US$116,500. The price peaked at US$117,920 before a minor retracement to the 50 per cent Fibonacci level near US$116,750. Analysts anticipate resistance at US$117,500 and US$117,850, with a clear breach of US$118,000 potentially propelling it toward US$118,500 or even US$118,800. On-chain data reveals strong institutional accumulation, with ETF flows and whale activity supporting the floor. Social media discussions on platforms such as X highlight this breakout potential, with traders noting that a close above US$117,000 on high volume could ignite further upside. However, overbought signals from the RSI above 88 suggest a possible short-term pullback, with supports at US$116,550 and US$115,800 if resistance holds firm.
Solana has emerged as a standout performer, rallying beyond US$250, its highest in nearly eight months, and outperforming the altcoin market by 25 per cent over the past month. Institutional adoption drives this surge, with corporations holding over 17 million SOL tokens valued at US$4.3 billion. Notable players include Forward Industries with 6.82 million SOL, Sharps Technology at 2.14 million, and others like Defi Development Corp and Upexi Inc., nearing 2 million each. Helius Medical Technologies’ $500 million SOL treasury program echoes strategies like MicroStrategy’s Bitcoin reserves, bolstering SOL’s case as a reserve asset. The blockchain’s total value locked stands at US$14.6 billion, making it the second-largest DeFi ecosystem, while a 6.8 per cent staking yield surpasses Ethereum’s 2.9 per cent. Options data shows higher call premiums, indicating bullish trader sentiment, with predictions eyeing US$300 as the next target amid ETF approval hopes. X conversations amplify this enthusiasm, with users pointing to treasury strategies and network upgrades as catalysts.
Regulatory developments have further catalysed crypto’s ascent. The US and UK signed a memorandum to collaborate on quantum computing and AI, impacting blockchain security. Coinbase CEO Brian Armstrong expressed confidence in the Digital Asset Market Clarity Act passing through Congress, clarifying the roles of the SEC and CFTC. Australia’s ASIC eased stablecoin licensing, while the SEC approved Grayscale’s Digital Large Cap Fund—the first multi-asset crypto ETF and proposed rule changes to expedite ETF listings. These steps signal a maturing framework, reducing uncertainty and attracting institutional capital.
From my perspective, this moment feels pivotal for cryptocurrencies. The convergence of monetary easing, regulatory clarity, and institutional inflows positions digital assets for sustained growth, potentially eclipsing traditional markets in volatility but also in returns. Bitcoin’s resilience above US$117,000 amid broader economic shifts suggests it’s evolving from a speculative play to a legitimate hedge, much like gold in past cycles. I remain cautious. Rate cuts don’t erase risks like stagflation or geopolitical tensions, and crypto’s history of sharp corrections warrants prudence. Investors should diversify their portfolios and closely monitor macroeconomic indicators.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
