Kunpeng Project
The article is about 2000 words in total, and it is expected to take about 7 minutes.
The Fed lost money. While everyone is mourning the death of Charlie Munger, the American financial community is facing an even bigger crisis, that is, the Federal Reserve is losing money. And the Fed's losses are not simply billions or even tens of billions, but 860 billion. And we know that the Federal Reserve, as the world's central bank, has always been only making money, so will there be a time when it loses money?
And the Federal Reserve has always been, whether it is a U.S. interest rate hike or a U.S. interest rate cut, the Federal Reserve is the institution that makes sure to make money and does not lose money, but the dollar tide has not yet completed the harvest, and the Fed has suffered a huge loss of 860 billion. The Fed can't hold on anymore, is the U.S. debt crisis about to advance?Is the Fed going to cut interest rates ahead of schedule?
The Fed suffered100 million "huge loss".
It is normal to say that anyone loses, but huge losses for the Fed are still rare. After all, the U.S. interest rate hike is a decision made by the Federal Reserve after unanimous deliberation, and it can be said that only the Fed has always eaten meatHowever, this is the case, that is, the Fed has a huge loss of 860 billion.
Recently, the Federal Reserve released its own relevant financial data, and in this data, the Federal Reserve created an accounting account, that is, deferred assets, that is, this asset is already nominally loss-making, but this item is deferred. In this account, this asset has reached 860 billion.
In other words, the Fed's current loss is 860 billion. And according to Wall Street's analysis, this loss is likely to continue to increase, and it is possible to reach the scale of trillions in the future.
This is, quite assumingly, so to speak. After all, the Fed has always given us the perception that the world's central banks exist. The Federal Reserve raised interest rates, central banks around the world were forced to raise interest rates, the Federal Reserve cut interest rates, and central banks followed suit. It can be said that the Fed is the bellwether of the world's central banks.
However, this time, the Fed has taken the lead in making a loss, which can be said to be rare in the world. After all, in history, the Fed basically did not have a loss, even in the 70s of the last century, when the United States encountered the oil crisis, the Fed did not have such a large-scale loss now, it can be said that the Fed's loss this time is unusual.
And as we all know, the banking policy in the United States is basically decided by the Federal Reserve, and this is also a manifestation of the will of the major banks. And it has always been only the Fed that eats meat, and even if it drinks soup, the Fed is the thickest bowl to drink.
And in 2021 and 2022, the Federal Reserve paid nearly 100 billion or so to the United States, but why did it suddenly lose money this year?
And we all know that the essence of the U.S. interest rate hike and interest rate cut is to complete the global asset harvest, and the driving force behind these asset harvesting is the Federal Reserve, but now it's good, the United States itself has not harvested much, but the Fed has lost money first.
Where does the Fed's losses come from?In fact, it is very simple, the Fed's loss comes from the US interest rate hike, that is, the Fed itself raises interest rates, adding and adding to its own losses.
The main thing here is the U.S. debt. In the past, we all know that the United States has always implemented low interest rates, so the Federal Reserve holds a large number of U.S. bonds, and in the past two years, the Fed has raised interest rates by itself, resulting in a huge difference between past bond yields and current bond yields.
And this has led to a serious drop in the value of U.S. bonds held in the past, and finally what we see now, the Federal Reserve has suffered huge losses.
Moreover, the reason for the collapse of First Republic Bank and Silicon Valley Bank in the United States was that they had a floating loss due to their holdings of U.S. bonds, coupled with a run, and finally collapsed due to a liquidity crisis.
Today, the Fed is suffering huge losses on a similar basis. Besides, now even the Federal Reserve is already losing money, and other small and medium-sized banks in the United States have long lost money. And this time, there are related **institutions**, if the Federal Reserve continues to raise interest rates or keep it high for a long time, nearly half of the small and medium-sized banks in the United States will fail in the future.
It can be said that the U.S. interest rate hike is a wave of seven wounds. But this wave of punches itself has already been injured, can the United States still complete the global harvest?Is the US interest rate cut really coming?
Will the U.S. economy recession?
As a financial empire, the United States has risen and fallen because of finance. Even, on the basis that the Fed has not yet decided to cut interest rates, there are institutions**, and the US economy will recession.
We know that since the beginning of this year, the data in the United States has looked very good on the surface, and even sometimes the state of its data is that the United States economy is booming, but according to the consumption data of the United States and the electricity consumption of industrial and residential electricity in the United States, the American economy has already shown signs of recession.
However, both the US non-farm payrolls data and the employment data are showing the strength of the US economy. In fact, behind this is all in the service of the harvest of the dollar.
However, this harvest is not so simple, because now the United States is still carrying nearly 335 trillion U.S. bonds, its annual interest is nearly a trillion yuan, this is the price. And this time, the Fed's huge losses are a good confirmation of this, that is, the United States is moving forward with a heavy load.
It will not be so easy for the United States to want to harvest. And we all know that the scale of debt in the United States is not infinitely expanding, and the intensity of borrowing is also a degree. And now the Fed's losses mean that the limit seems to have been reached in the United States.
If interest rates are raised more aggressively, perhaps the history of Silicon Valley Bank will repeat itself. After all, Wells Fargo has been technically unable to withdraw money several times, and if there is another negative, the run caused by panic may not be able to stop even if the United States pulls out the network cable itself.
And judging from the recent statements of the Federal Reserve, the Fed's expectations for interest rate hikes are gradually weakening, and the previous market transactions show that the scale of US interest rate cuts in the next year will even reach nearly 100 basis points.
This time, the German banking industry came forward to say that the Federal Reserve will cut interest rates more than expected. On the one hand, it may be that the US economy is under too much pressure, and on the other hand, it may be that the US economic data can no longer be modified.
In the first half of this year, the Federal Reserve has lost nearly 400 billion, and even carried out corresponding layoffs, and now it has exceeded 860 billion, that is, the Fed's losses are expanding rapidly. So, the Fed has also opened to the limit.
And the U.S. Treasury is approaching to raise the debt ceiling. Therefore, on the one hand, the pressure on itself is increasing, and on the other hand, the expectation of the success of the harvest in the United States is constantly decreasing, so how to choose between the recession and the harvest has become the last choice of the Fed.
But in any case, judging from the available data in the United States, this rate hike has basically come to an end, that is, it is time for the United States to cut interest rates. And what we can do is to build a high wall and survive the last winter, which will be a year of spring flowers ahead.
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