What tricks is the Fed really playing now?😱

Let's start with a counterintuitive fact: lowering interest rates is not necessarily a good thing.

Last November, when the US stock market plummeted, Fed officials collectively changed their tune and became bullish, with the market raising the expectation of interest rate cuts to 90%📈. What was the result? The policy committee still appeared indecisive during their meeting. Why? Because they are caught between two deep pits—maintaining high interest rates while the AI bubble and employment data can't hold up; if they really cut rates, they fear that funds will flee due to narrowing interest rate differentials, leading to a more dire situation of liquidity drying up🌪️.

This old concept needs to be broken.

Economics textbooks tell you that lowering interest rates stimulates credit and increases the money supply, leading to rises in the stock and real estate markets. That logic applies to a closed economy! Now, funds are flowing globally in search of returns, and the side effects of lowering interest rates may be even more severe than the positive effects. Look at the comparison: during the high interest rate phase in the U.S., the stock market and real estate skyrocketed; here, with continuous interest rate cuts, the A-shares and Hong Kong stocks have instead faced a continuous green light, with over 1 trillion yuan flowing out of the country from 2021 to now 🇺🇸.

The core point is this: whether interest rate cuts are beneficial or detrimental depends on whether the "increment of money creation" can outweigh the "gap of capital outflow."

So the Fed's current operations are quite subtle —
✅ No rate cut? AI companies face mounting financing pressure, and the unemployment rate continues to rise;
❌ Drop? Withdrawing funds may trigger a domino effect;
🎯 What to do? Release hawkish messages to test the market reaction while subtly relying on the China-U.S. interest rate differential as a buffer (for example, suppressing the interest rates of Chinese bonds denominated in dollars), keeping the rhythm tightly controlled.

Let's talk about market linkage again🔗. Gold, Bitcoin, and US stocks are now closely tied together, with increasing hedging properties; fluctuations in oil prices directly affect the US dollar index and gold trends; the AI sector has further connected global tech stocks with commodities like non-ferrous metals and electricity. If the interest rate cut pace is wrong, leveraged positions could lead to a chain reaction of liquidations, causing market sentiment to collapse instantly.

Ultimately, in the long run, excessive currency issuance is a hard rule, but in the short term, one must be careful of sudden liquidity withdrawals! When the market fluctuates, don't follow the emotions and make reckless moves. Distinguish between what is short-term noise and what is a long-term trend, and your mindset will stabilize.

Do you think the Fed will really cut interest rates in December? Let's talk about your views 👇#美SEC推动加密创新监管 $ZEC $ASTER