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.

After months of debate among global investors about whether the Federal Reserve will cut rates by 25 basis points or 50 basis points, the Federal Reserve will finally reveal its final answer to the world.

As the "leader" among global central banks, the Fed's interest rate decision has a profound impact on global financial markets. However, Sophia Drossos, a strategist and economist at hedge fund Point72 Asset Management, believes that this rate cut by the Federal Reserve will be a major moment, marking the formal entry of the US dollar into a downward trend and boosting the economies of other regions around the world.

The Fed's rate cut will initiate a trend of US dollar depreciation.

According to CME's FedWatch tool, the market has generally agreed that the Federal Reserve will cut rates in September, but there are differing expectations for the magnitude of the rate cut: some believe there is a 65% chance of a 50 basis point cut, while others believe there is a 35% chance of a 25 basis point cut.

Prior to the official announcement of the Federal Reserve's decision, the expectation of a rate cut has already put pressure on the US dollar: August was the worst-performing month for the US dollar exchange rate this year.

Drosothus said that with the Fed's interest rate cut, the US dollar will weaken further, and all major currencies in the world will benefit, with the euro and the Brazilian real expected to receive the largest increase.

"This (Fed interest rate cut) is the beginning of a new trend of a weaker US dollar," she said. "With the Fed starting to cut interest rates, other central banks have also followed suit, and we will see a stronger global economic growth outlook."

Other countries' easing measures may fall short of expectations.

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

However, Drosothus believes that the easing measures of central banks in many regions around the world may be lower than expected.

Firstly, she expects that the speed of interest rate cuts by the European Central Bank will be slower than market expectations, which will support the euro exchange rate.

In Brazil, the central bank is expected to raise interest rates on Wednesday, which will obviously boost the real. Drosothus said that after this year's sell-off, the real currently appears cheap and has great upward potential.

In addition, Japanese central bank officials have repeatedly hinted at raising interest rates in the near future. This has supported the upward trend of the yen exchange rate in the past two months.

The question of whether the Fed's interest rate cut this time will be 25 basis points or more is still uncertain. Drosos expects that the Fed will choose a smaller rate cut (i.e. 25 basis points). If this turns out to be true, it may trigger a subconscious market reaction, as many investors have already anticipated a larger rate cut by the Fed.

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