Interest Rate Cut

Definition ∞ An interest rate cut is a reduction in the benchmark interest rate set by a central bank. This action aims to stimulate economic activity by making borrowing cheaper for businesses and consumers. Such policy adjustments can have significant implications for investment flows into various asset classes, including digital assets.
Context ∞ The current global economic climate features considerable speculation regarding potential interest rate cuts by major central banks, particularly the US Federal Reserve. Analysts are assessing the impact these reductions might have on liquidity, inflation expectations, and the attractiveness of risk assets like cryptocurrencies, influencing investment strategies.