Countdown to U.S. Rate Cuts Educational Series (4) Understand the basic logic of monetary policy rate cuts/hikes in one image!! Rate cuts are the most direct factor influencing liquidity in the crypto space and U.S. stock market. To help everyone understand better, here’s a supplementary chart. Rate cuts lower financing costs → release liquidity → stimulate investment and consumption → drive up risk asset prices (stocks/crypto). Rate hikes increase capital costs → tighten liquidity → curb overheating inflation → suppress asset valuations. The core pathway of monetary policy: policy rates → market liquidity → corporate/personal credit → asset pricing reevaluation → economic expectation adjustments, creating a chain reaction of investment impacts on the stock market, crypto space, bond market, and exchange rates.