More Articles: How Does the 25bp Cut in 5-Year LPR Impact the Market? On February 20, the People's Bank of China authorized the National Interbank Lending Center to announce the latest loan market ** interest rate (LPR), and the one-year LPR remained at 345% unchanged, LPR over 5 years cut by 25 basis points from 42% to 395%。
This is an asymmetric interest rate cut, with LPR of more than 5 years cut by 25 basis points, the largest drop since the anchor change in 2019. Some people think that the 5-year LPR is a larger-than-expected downward revision, but I think it makes sense.
At present, the problem of declining domestic consumption is still obvious, resulting in poor supply and demand, coupled with low inflation due to overcapacity, the debt pressure on enterprises and residents is becoming heavier and heavier in the same period, the real estate and the first dual asset pool are under pressure, the rapid growth of real estate bonds, the rapid growth of local debts, and the pressure of systemic risks is still there, and Wall Street has taken the opportunity to continue to impact China's systemic security, resulting in pressure on domestic economic growth and employment. In this case, it is not in line with the actual market to continue to cut interest rates in small steps, and only a return to the normal pace of adjustment will be beneficial to the overall stability of the domestic economy, so it is beneficial to cut the LPR by 25 basis points for more than 5 years.
Last year, I was critical of the control of the policy interest rate MLF to guide the LPR**, and then promote the marketization of interest rates, although this interest rate adjustment method emphasizes the soundness of monetary policy, but can not respond to systemic risk pressure in a timely manner, so that systemic risk in the critical period of unnecessary upward movement, and then bring heavier pressure to China's macroeconomic control.
Therefore, I personally believe that the domestic monetary policy adjustment should strengthen flexibility during the critical period, and return to the basic adjustment pace of 25 basis points, rather than repeatedly expanding the systemic risk exposure in the form of broken interest rate cuts, which will only bring a more complex situation to the later adjustment, and the result is to lead to the overall passivity of systemic risk control, leading to the continuous emergence of negative feedback problems, especially in the critical period of the Sino-US financial game, giving people a handle and creating conditions for Wall Street to attack China's market. Therefore, the consistency of monetary policy adjustment should be strengthened during the systemic risk window period.
Since the second half of last year, Wall Street has taken China's real estate bonds as a breakthrough and began to impact China's financial market, trying to use China's real estate bubble as a breakthrough to achieve the goal of shorting China. Taking this as a bargaining chip to blackmail China to buy U.S. bonds and open up according to the financial roadmap delineated by the United States, this is actually to harvest China's wealth with a comprehensive strategy, and use financial means to frantically transfer the debt crisis to our country.
In this round of Sino-US financial offense and defense, the country has made some mistakes, resulting in our country is more passive in financial defense, but this imbalance process has not yet reached the extent that it is difficult to remedy, if China can slow down the pace of high-speed financialization, and recognize that the continuous expansion of the middle class is the cornerstone of China's long-term steady economic development, China's financial market will be rapid and stable, will be the Sino-US financial game back to the balance point again, and wait for the test of time. And the time is on the side of our country, which is determined by the fact that the Western capital world has once again deepened the problem of high financial bubbles, and by the sharp increase in the scale of US debt.
Therefore, this round of financial offensive and defensive warfare is a systematic offensive and defensive battle, and it is a test of the country's comprehensive strength. As far as the financial market is concerned, it is a test of the joint external attack and defense of the mainland and Hong Kong, a test of the security of bonds, real estate, A-shares, commodities, foreign exchange and other important asset pools and various financial products, a comprehensive test of China's fiscal policy and monetary policy, a comprehensive test of China's high-speed financialization and the opening up of the financial market, a comprehensive test of China's high-end financial management team, and a comprehensive test of China's financial strategy. This period will inevitably be accompanied by the price to be paid in the process of China's financial growth.
It is hoped that the country can listen carefully to the positive opinions in the market, quickly clean up the financial Trojan, actively build a clean and high-quality management team, and contribute to sticking to China's financial frontier and contributing to the protection of national and national wealth! (This article is an original article by Xinyue said finance, **please indicate the author and** in Baijia Xinyue said finance).