On the evening of the 20th (Beijing time), cryptocurrencies still in trading collectively surged, turning positive, only to plunge again by the morning of the 21st. Data from CoinGlass shows that within the past 24 hours, over 67,000 traders faced liquidations in the cryptocurrency market.
In fact, U.S. stocks had risen for two consecutive days, with many market participants optimistic about the trend as the holiday season approaches. Analysts attribute this to economic data reinforcing expectations that the Federal Reserve will adopt a rate-cutting strategy.
In November, U.S. inflation was significantly lower than economists' forecasts, while the unemployment rate unexpectedly rose. Some institutions believe this highlights the limited room for inflation to surge beyond expectations. If the labor market continues its current trajectory—with unemployment rising by 0.1 percentage points monthly—the potential for further rate cuts next year may be underestimated.
Traders now see a 28.8% chance of a 25-basis-point rate cut in January, up from 26.6% before the inflation data release. According to LSEG, traders are betting on roughly 64 basis points of Fed easing by 2026, compared to 63 basis points prior to the inflation report.
Separately, U.S. President Trump hinted in a televised address on the 17th that his nominee for the next Fed chair would support "substantial" rate cuts. "I will soon announce our next Fed chair," Trump said, adding that this individual backs significantly lower rates, which would further reduce mortgage payments.
The Fed had cut rates on the 10th, but Trump criticized the move as "too small," stating that U.S. rates "should be the lowest in the world." Reports indicate Trump is still evaluating candidates, having interviewed Fed Governor Christopher Waller on the 17th.
In a Wall Street Journal interview on the 12th, Trump named former Fed Governor Kevin Warsh as the top contender for the position, while also praising White House National Economic Council Director Kevin Hassett. Trump expressed a desire for the federal funds rate to drop to "1% or lower" within a year to help reduce the Treasury's high borrowing costs. He added that the next Fed chair should consult him on rate decisions but need not follow his advice strictly.
Meanwhile, some senior officials close to Trump reportedly oppose Hassett's candidacy. Since taking office again in January, Trump has repeatedly criticized the Fed for being too slow to cut rates and even threatened to remove Chair Jerome Powell.
Powell's term expires in May next year. Under U.S. law, the president's Fed chair nominee requires Senate approval. Despite enduring prolonged criticism from Trump over rate policy, Powell has refused to resign, emphasizing the Fed's independence in monetary policy.
Beyond the U.S., a global wave of rate cuts is underway, with multiple countries potentially cutting rates several times by 2026. From mid-December to the 19th, central banks in Russia, the U.K., Mexico, and Chile announced rate cuts, marking a new round of global monetary easing.
Russia led with the largest cut at 50 basis points, followed by the U.K. and Mexico at 25 basis points each, while Chile made a modest 25-basis-point reduction.
The signals of widespread rate cuts quickly rippled through financial markets, with precious metals emerging as direct beneficiaries. Gold and silver prices surged explosively, posting their best performances in years. The dual appeal of precious metals—as inflation hedges and low-opportunity-cost assets—drove sustained capital inflows.
On the 19th, precious metals rallied broadly: spot gold rose 0.2% to $4,341/oz, while COMEX gold futures edged up 0.1%. Spot silver jumped 2.44% to $67.049/oz, hitting an all-time intraday high of $67.4595. COMEX silver futures surged 3.34%, reaching a record $67.680. COMEX copper futures gained 0.90%, while spot platinum and palladium rose 2.60% and 1.30%, respectively.
Bolstered by central bank gold purchases and continued inflows into gold ETFs, silver prices have soared over 130% this year, while gold has climbed more than 65%.
(Disclaimer: The content and data herein are for reference only and do not constitute investment advice. Investors assume all risks.)
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