Why is the Fed starting to cut interest rates next year, because the global KPIs have been harvested

Mondo Finance Updated on 2024-01-30

The Fed's decision to start cutting interest rates next year is mainly due to the challenges faced by the U.S. economy under a policy of high interest rates. This decision is not simply a scenario described by "harvesting the world" or other conspiracy theories, but is based on an in-depth analysis of the current economic situation**.

The analysis points out that the US economy is currently in a state of "walking on thin ice" and has not yet collapsed, but it does face risks. To avoid a recession, the Fed plans to stimulate the economy by lowering interest rates. This is because there is a time delay for the interest rate adjustment to have an effect on the market, usually 6 to 12 months. Therefore, the Fed needs to take steps ahead of time to ensure economic stability.

Data supporting this view includes:

Electricity consumption in the United States has declined: Electricity consumption is often closely related to economic activity. Electricity consumption is expected to fall by 2%-3% for the full year, reflecting a slowdown in economic activity.

The volume of logistics and transportation has declined: The financial reports of US logistics giants such as UPS showed that the volume of parcel shipments fell sharply year-on-year this year, indicating a slowdown in economic activity.

Changes in the job market: Independent survey data from ADP, a private U.S. company, showed that the number of new jobs in November was lower than official and has been on a long-term downward trend since June. This suggests that the U.S. job market may not be as rosy as official data suggests.

Taken together, the Fed's decision to cut interest rates appears to be a reasonable response to the current economic situation and aimed at avoiding a deeper recession. This move by the Fed is not motivated by some hidden motive, but is based on an analysis of economic fundamentals and the prevention of future risks.

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