On the early morning of September 19th Beijing time, the Federal Reserve announced that it would lower the target range of the federal funds rate by 50 basis points, bringing it down to between 4.75% and 5.00%.

This is the first interest rate cut by the Fed since March 2020.

Before the meeting, the market expected a 50 basis point cut with a probability of around 66%, so this rate cut was slightly more than expected.

After the Fed's announcement of the rate cut, market sentiment was shaken, and investors tried to digest the multiple signals released by the Fed.

Following the rate cut, especially under this "unconventional" cut and with market expectations already fully anticipated, how global assets should be traded is a question of general concern to investors.

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Reactions to U.S. dollar assets were "mixed".

Looking at the market reaction, U.S. stocks reacted significantly to this meeting.

After the interest rate decision was announced, U.S. dollar assets rose quickly, with the three major U.S. stock indices and gold hitting new highs during the trading session.

However, during the subsequent press conference, Fed Chairman Powell again took a hawkish stance, and U.S. dollar assets quickly erased the previous gains, with the three major U.S. stock indices, the dollar, and gold all closing lower, and U.S. Treasury yields rising.

Zhou Hao, Chief Economist at Guotai Junan International, believes that after Powell's press conference, U.S. stocks, the dollar, and U.S. Treasuries saw a significant reversal.

"The final market sentiment is that although the Fed cut rates by 50 basis points, it also seems like 25 basis points.

From the feedback of the capital market, the Fed's rate cut seems to have been fully priced in."

Ping An Securities' research report analyzes that for the short-term U.S. stock market, the factors affecting the market in the near term are quite "chaotic", with U.S. economic data fluctuations and the U.S. election being the two main lines of concern for investors.

Under the baseline assumption of a soft landing for the U.S. economy, the institution maintains an optimistic view of the U.S. stock market in the long term; but in the short term, with a series of factors such as Powell's hawkish stance, the high valuation of U.S. stocks, and the U.S. election, investors are advised to be cautious about U.S. stocks in the near term.

The Japanese stock market, which is highly correlated with the U.S. stock market, also needs to be noted.

On Thursday Beijing time, the Nikkei 225 index opened and closed higher throughout the day, closing at 37,155.33 points, up 2.13%.

It should be noted that the Bank of Japan's interest rate meeting on September 20th is also worth the market's attention.

The Japanese yen has been rising steadily over the past two months and approached the 140 mark on the morning of the 19th.

Huatai Securities stated that as the policy divergence between the U.S. and Japan continues to narrow and Japan's domestic growth momentum is repaired, the yen has further appreciation momentum in the medium to long term.

Emerging markets are expected to benefit from the Fed's rate cut.

Before the Fed officially announced the rate cut, many assets in emerging markets had already priced in this factor and risen in advance.

In the trading of the Asia-Pacific market on September 19th, the MSCI Asia Emerging Markets Index rose by more than 1%, and the Shanghai Composite Index, India's SENSEX 30 Index, Vietnam's Ho Chi Minh Index, and other major stock indices all closed in the red.

Many market views believe that the valuation advantage and potential monetary policy space have increased the attractiveness of emerging market assets in global capital.

Barclays said in its quarterly report on emerging market macro strategy that for most of the year, emerging market assets have been constrained by Fed policy, but as the Fed starts to cut rates, the situation is changing rapidly.

The Fed's shift to a more moderate and loose stance is enough to support the recent re-pricing of emerging market interest rates.

Ping An Securities said that for emerging markets, under the Fed's rate cut, emerging market assets may be more attractive.

As the Fed starts to cut rates, the global financing environment may continue to relax in the next few months, which will help central banks in emerging markets to restart or continue their loose policies.

At the same time, the lower risk-free rates in developed markets will also reduce the external borrowing costs for emerging market issuers, thereby reducing refinancing risks and enhancing debt sustainability.

The loose cycle will prompt asset allocators to increase their exposure to emerging market risks, and the attractiveness of emerging market assets is expected to increase.

Manish Bhatia, CEO of Straits Investment Management, believes that the Fed's rate cut may boost investors' risk appetite for Asian stocks, driving capital inflows into emerging markets as investors seek higher returns.

International gold prices may adjust in the short term.

Among major assets, the trend of gold is also closely watched.

This year, gold prices have hit new highs repeatedly, greatly enhancing the possibility of gold as an independent asset category.

After the Fed's rate cut decision was announced, the spot gold price quickly rose to $2,600 per ounce, setting a new historical high, but then gave up the gains and fell back to around $2,559 per ounce.

Chen Jierui, a senior analyst at Jia Sheng Group, said that the previous gold price had priced in a 50 basis point rate cut and a more aggressive rate cut outlook for the whole year, so when Powell downplayed the possibility of a series of large rate cuts in the conference, the gold price gave up the daily gains after hitting a new historical high.

In the short term, the correction of gold prices may continue.

Luo Zhiheng, Chief Economist of Guangdong Kai Securities, believes that the "sprint" of gold is obvious, and there may be a short-term correction risk; but in the medium to long term, with factors such as global "de-dollarization" and intensified geopolitical factors, gold prices may still be in a long-term rising cycle.

Liu Gang, Chief Overseas Strategy Analyst at China International Capital Corporation, summarized the performance of various assets in each interest rate cutting cycle since the 1990s.

He believes that generally speaking, assets such as U.S. Treasury bonds and gold performed better before the rate cut than after the rate cut, while after the rate cut, as the effects of easing gradually emerge, assets such as industrial metals and crude oil performed better after the rate cut than before.

Liu Gang believes that gold may have a certain holding opportunity at present, but the short-term space is limited.

If subsequent data confirm that the U.S. economy is not under great pressure, investors should exit assets such as gold in a timely manner.

In contrast, more certain are short-term bonds that directly benefit from the Fed's rate cut, the gradually repaired real estate chain, and copper.