The sudden financial turmoil hit the state-owned banks again, heralding another reduction in deposit rates, which were unbelievably between 10 and 30 basis points. This is not the first time that it has only been three months since the last round of rate cuts, and this time the rate cut is only for the deposit rate, while the lending rate and LPR remain unchanged. Provident fund loan interest rates have been forgotten, and it has become increasingly difficult for ordinary people to obtain property income. The repeated decline in deposit rates has made it like a tasteless chicken rib, and the performance of wealth management products in the fourth quarter has been even more dismal, with generally negative returns expected.
From January to November this year, the scale of deposits increased by 26 trillion yuan, and it is expected to reach a huge scale of 30 trillion yuan for the whole year. Deposits have soared to $130 trillion, surpassing the country's total GDP. Although people generally choose to save rather than consume and invest, a closer look at the structure shows that young people are under huge economic pressure to spend money, while the wealth of the elderly is mainly concentrated in the hands of the post-60s and post-70s.
While people are saving aggressively, the younger generation's desire to spend is declining, and more and more people are choosing to lower their consumption levels, perhaps because of concerns about future risks. While there is room for interest rate cuts, only deposit rates have been cut and lending rates have remained unchanged, raising questions about bank profit protection and making the possibility of LPR cuts slim.
In the past three years, we have been accustomed to a rate cut or RRR cut every quarter, but the fourth quarter of this year has surprisingly not arrived as scheduled. The total amount of M2 has exceeded 291 trillion, with a growth rate of more than 10%, but at the same time, the CPI continues to be ** and assets ** are also declining, which has raised concerns about where the currency will go. Perhaps money flows within the financial system, but it doesn't work as well as people would like.
Despite the lackluster monetary policy performance, it remains to be seen whether a pause will be followed by a larger strategy. Some analysts** may adopt a more aggressive fiscal policy next year as an alternative to monetary stimulus. While this may theoretically work out better, past expectations have not been fulfilled and expectations for next year need to be cautious. With the growth rate of M2 likely falling back to less than 10%, the future economic outlook is still full of uncertainties.