The Fed's interest rate policy has always been the focus of market attention, especially regarding its impact on the stock market and the crypto assets market. Lowering interest rates is usually seen as a favourable information factor, but what is the logic behind it?

Lowering interest rates can be likened to opening the financial faucet. When interest rates are cut, the cost of funds decreases, leading more capital to flow into higher-risk but potentially higher-return assets, such as stocks and Crypto Assets. This flow of capital often drives these markets upward.

On the contrary, raising interest rates is similar to turning off the tap. In a high interest rate environment, funds are more inclined to flow back to low-risk assets such as banks, potentially leading to outflows from the stock market and Crypto Assets market.

However, the impact of financial policy is not so simple and direct. For example, if the U.S. issues a large amount of government bonds while raising interest rates, it is essentially implementing a complex strategy of 'both injecting and withdrawing liquidity'. This practice may lead to the market still maintaining ample liquidity, with the stock market continuing its upward trend.

This seemingly contradictory policy mix reflects the decision-makers' balance between managing the domestic economy and the global financial markets. It attempts to find a delicate balance between controlling inflation and maintaining economic growth.

Overall, although interest rate policies do have a significant impact on the market, investors should also recognize that market trends are influenced by multiple factors and should not overly simplify the role of a single policy. When making investment decisions, it is necessary to consider various economic indicators and market factors comprehensively.