---
title: "🚨 S&P500 erased $1.8 TRILLION of market cap on Fed \"hawkish cut\"."
description: "‼️ Big Tech, Bonds, Bullion and Bitcoin fell sharply after the Fed cuts rates by 25 basis points - which is exactly what 97% of market participants expected. \nSo what happened❓\n👉 Actually, today's market reaction had NOTHING to do with the rate decision.\nRather, it would about the Fed's outlook for 2025 which shifted SHARPLY in the hawkish direction.\n👉Indeed, the hashtag#Fed reduced their outlook from 3 to 2 rate cuts in 2025. \n👉Furthermore, the Fed now sees hashtag#inflation at 2.1% at the end of 2026, still slightly above their 2.0% target.\n\n⚠️ The stock market's decline accelerated after Powell said one specific sentence in his press conference today: \"Today was a closer call but we decided it was the right call.\"\n⚠️The US Dollar surged to its highest since November 2022 after he said that.\nClearly, the Fed has acknowledged that inflation is an issue, once again.\n\n⚠️On top of this, Cleveland Fed President Beth Hammack dissented in today's decision.\n1 out of 19 Fed officials sees no rate cuts in 2025 and 3 officials see just 2 rate cuts. Only 5 Fed officials currently see 3 or more interest rate cuts in 2025 in a sudden hawkish shift.\nThis led to what appears to have been the biggest panic sell in the market since the Yen carry trade collapsed.\nSmall cap stocks fell nearly 5% today and the Dow posted a 10-day losing streak for the first time since 1974.\nSentiment is shifting as we look into 2025."
---

[Syz The Moment](https://blog.syzgroup.com/syz-the-moment)

# [🚨 S&P500 erased $1.8 TRILLION of market cap on Fed "hawkish cut".](https://blog.syzgroup.com/syz-the-moment/🚨-sp500-erased-1.8-trillion-of-market-cap-on-fed-hawkish-cut)

 Written by [Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/syz-the-moment/author/charles-henry-monchau) | Dec 19, 2024, 4:27:35 PM

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