The possibility of the Federal Reserve lowering interest rates in September is now very high, with the market generally believing that the probability of a 25 basis point cut has reached 88.9%. However, there is still uncertainty about whether there will be a 50 basis point cut. This decision could have far-reaching effects on global financial markets.

Historical data shows that after the Federal Reserve rapidly lowers interest rates, the U.S. stock market often experiences significant declines. The previous rate hike cycle led to capital flowing back to the U.S., pushing up U.S. stocks, but it also triggered capital outflows and deflationary pressures in emerging countries, including China, resulting in poor performance of these countries' stock markets.

Analysts expect that after the interest rate cut in September, the Federal Reserve may implement three more rate cuts within the year, initiating an accelerated rate-cutting path. This move may indicate a deterioration in the economic conditions of the United States. Against this backdrop, investors may choose to sell U.S. Treasury bonds and stocks, turning to invest in emerging market assets. It is worth noting that A-shares and Hong Kong stocks have already entered the early stages of a bull market since April 2025.

If the Federal Reserve chooses to cut interest rates by 25 basis points, the People's Bank of China may take a wait-and-see approach. However, if the rate cut reaches 50 basis points, the People's Bank of China may follow suit with a rate cut or adopt measures to loosen monetary policy, which could provide stronger upward momentum for the A-share and Hong Kong stock markets.

However, the situation may not be optimistic for the cryptocurrency market. Due to the high correlation between cryptocurrencies and U.S. tech stocks, investors may sell off cryptocurrencies at the same time they sell off U.S. dollar assets after interest rate cuts. This could lead to a bear market in cryptocurrencies, with mainstream cryptocurrencies potentially facing declines of 60%-80%, while smaller coins may experience even more severe drops.

Overall, the Federal Reserve's decision to cut interest rates will have a profound impact on global financial markets, and investors need to closely monitor policy changes and adjust their investment strategies accordingly.