The Financial Associated Press reported on December 20 (Editor: Huang Junzhi) that the Federal Reserve poured cold water on the market this Wednesday, and Wall Street's "dream of rate cuts" seems to have been shattered.

Rate cuts not only boost spending, investment, and hiring, but also make risk assets like stocks relatively more attractive by lowering yields on safe assets such as USA Treasuries.

Although the "three-time rate cut" arrived as expected, the latest prediction from Federal Reserve officials is that there will only be two rate cuts next year, lower than the previously expected four. This indicates that the Federal Reserve's "hawkish rate cut" path may have begun, leading to a significant drop in the US stock market, with all three major Indexes falling by over 2.5% on Wednesday.

In response, Wall Street analysts do not seem too worried and believe that Wednesday's sell-off is a "buying opportunity on dips," and that a strong reaction to the Federal Reserve meeting is unlikely to undermine this year's "Santa Claus" rally.

Here are some specific viewpoints from investors and analysts:

David Rosenberg, a renowned economist in the USA and president of Rosenberg Research.

This is a Federal Reserve that at no time believes in its own views; it prefers to respond passively rather than take the initiative, even though its actions have a long lag effect on the economy.

You might think that a huge change has occurred in the world since the significant interest rate cuts three months ago, based on the changes in comments and forecasts. But it is clear that it doesn't take much for this Federal Reserve to change its viewpoint. It can be assured that it will change again.

Citigroup Chief U.S. Economist Andrew Hollenhorst.

Once signs of weakness appear in the job market, the Federal Reserve's hawkish policy stance may not last long and could turn dovish instead.

In the coming months, the continued weakness in the job market may become more pronounced, leading to interest rate cuts by the Federal Reserve that exceed market expectations. We anticipate that Powell and the committee will significantly pivot to a dovish stance in the coming months.

Famed Analyst Dan Ives from the American investment bank Wedbush.

The Federal Reserve's interest rate path will not be a driving force for technology stocks in the coming years.

Ultimately, this will not affect the economic soft landing and the bullish backdrop for risk assets.

Investors should focus on the two biggest catalysts for the technology industry in 2025: the ongoing development and adoption of AI, and a more favorable regulatory environment that will pave the way for more mergers and acquisitions.

Carol Schleif, Chief Investment Officer of the Bank of Montreal Family Office.

Investors have overreacted because they knew prior to the meeting that the Federal Reserve might signal a pause in interest rate cuts.

Most importantly, the economy remains strong, which is crucial.

The market seems to have overlooked the times and ways in which Chairman Powell pointed out how strong the economy is. The Federal Reserve has good reasons for slowing down the pace of rate cuts, namely that the strong economy ultimately matters most for Stocks and corporate profits.

Matt Britzman, Senior Equity Analyst at Hargreaves Lansdown.

After experiencing a wonderful market since the USA elections, investors should see this as a healthy time to take profits rather than the end of the celebration.

Jamie Cox, Managing Partner at Harris Financial Group.

The market has a very bad habit of overreacting to the Federal Reserve's policy moves. The Federal Reserve has not done or said anything that deviates from market expectations.

The good news is that the recent sell-off should pave the way for a Christmas rebound next week.

Jochen Stanzl, Chief Market Analyst at CMC Markets.

The news released by the Federal Reserve last night during the interest rate cut was a good show for the stock market.

The Federal Reserve is sending a clear signal that it has nearly completed the interest rate cut phase. 2025 will be an important turning point for the Federal Reserve's rate cut cycle. However, if inflation data continues to rise in January and February, it may be time for rate cuts again.

Jean Boivin, Director of Investment Research at Blackrock.

The Federal Reserve poured cold water on the market's hopes for significant interest rate cuts in 2025.

Given the risks of renewed inflation brought by potential trade tariffs and the pressure on the labor market due to slow immigration, expecting only two more rate cuts in 2025 now seems reasonable.

We anticipated this policy outcome, so it will not change our recent view on the US stock market. The US stock market still stands to benefit from AI and other powerful forces, strong economic growth, and broad profit growth. We believe that by 2025, the US stock market will outperform its international peers.

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