On Thursday morning in peking time, the global market will usher in a major moment: the announcement of the Federal Reserve's September interest rate decision.

As the Fed's September rate cut has been basically set, and after months of debate among global investors about whether it will be a 25 basis point or 50 basis point cut, the Fed will finally reveal its final answer to the world.

As the leading central bank globally, the Fed's interest rate decision has profound implications for global financial markets. Hedge fund Point72 asset management company strategist and economist Sophia Drossos believes that the Fed's rate cut will be a major moment, marking the formal entry of the US dollar into a downward trend, and consequently boosting the economies of other regions in the world.

Fed rate cuts will initiate a trend of dollar depreciation.

According to CME's Fed observation tool, the market currently largely believes that the Fed will cut rates in September, but there is a difference of opinion about the expected size of the cut: 65% of the market believes there is a 65% probability of a 50 basis point cut, and a 35% probability of a 25 basis point cut.

Prior to the formal announcement of the Fed's decision, the expectation of a rate cut has already put pressure on the US dollar: August of this year has been the worst performing month for the US dollar exchange rate so far this year.

Drosos said that as the Federal Reserve cuts interest rates, the US dollar will further weaken, and all major currencies in the world will benefit, with the euro and the Brazilian real expected to see the largest increase.

"This (Fed rate cut) is the beginning of a new trend of the weakening US dollar," she said. "As the Fed starts to cut rates, other central banks are also cutting rates, and we will see a stronger global economic growth outlook."

The loosening measures in other countries may not meet expectations.

In fact, there are different views on Wall Street. Some analysts believe that even after the Fed cuts interest rates, the US dollar will remain strong because the weak global economy will force central banks around the world to accelerate rate cuts to boost domestic economic growth.

But Drosos believes that the relaxation of monetary policy by central banks in many countries and regions around the world may be lower than expected.

First, she expects that the European Central Bank will lower interest rates at a slower pace than the market expects, which will support the euro exchange rate.

In Brazil, the Brazilian Central Bank is expected to raise interest rates on Wednesday, which will obviously boost the real. Drosos said that after this year's sell-off, the real looks cheap and has great upward potential.

In addition, Japanese central bank officials have been voicing their hawkish stance recently, constantly sending signals to the market that they will raise interest rates in the near future. This has supported the appreciation of the yen over the past two months.

Regarding the question of whether the Federal Reserve will cut interest rates by 25 basis points or more, Drosophos expects that the Federal Reserve will choose a smaller rate cut (i.e. 25 basis points). If this is indeed the case, it may trigger a market reaction, as many investors have already anticipated a larger rate cut by the Federal Reserve.

Will the Federal Reserve cut interest rates as expected by the market in this meeting? What impact will it have on the stock market? Welcome mooer to make an appointment to watch the September FOMC interest rate meeting~

Editor/ping