On December 25, market sources said that global central banks are expected to start cutting interest rates next year, and China's expectations for interest rate cuts in the first quarter have also increased.
Rate cut?What is an interest rate cut?
In the simplest words, an interest rate cut is a reduction in interest rates, a reduction in the interest rate on bank loans from ordinary people.
In economic life, banks are indispensable, and there is a high probability that enterprises will borrow from banks, and ordinary people also need to borrow from banks to buy houses.
The central bank regulates financial market and economic fluctuations through interest rates.
When the loan interest rate falls, it is encouraging people to go to the bank to borrow more money and use the funds obtained from the loan for consumption.
The same goes for lowering deposit rates, when bank deposit rates are high, people are keen to keep their money in the bank;When deposit rates fall, people are more keen to take out their money and spend it.
Suppose that when the annual interest rate of the deposit is 3%, you can get 30,000 yuan of interest per year by depositing 1 million;But after the annual interest rate drops to 2%, you can only get 20,000 yuan a year if you deposit 1 million.
You may say that deposits are only deposited in the bank, and it doesn't matter how much interest you have.
So, what happens when the interest rate on bank deposits falls into negative territory?
Take the European Central Bank, for example, from 2012 to 2022, it was in an era of negative interest rates, and the bank deposit rate was stable at -025%。At this time, if you deposit 1 million, you will be deducted 2,500 yuan a yearWhen you save less and less money, you can only use it to spend
In addition, what impact will the interest rate cut have on the lives of ordinary people?
The most direct impact is prices**. The purpose of the interest rate cut is to stimulate economic development by encouraging a large amount of money to enter the market, but after a large amount of money enters the market, it is easy to cause inflation, and the money in the hands of the people will continue to depreciate and become less and less valuable.
Every time the world enters a cycle of interest rate cuts, there is a high probability that there will be economic growth and rising prices.
In 2024, if global central banks collectively enter a cycle of interest rate cuts, then the next round of economic growth will also come.
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