Why is the US dollar slow to cut interest rates? Some people say it's because they're afraid to lower interest rates, because when interest rates go up, they can't stop.
Is this round of interest rates** a success or a failure? We'll reveal the rationale behind the cut and the real mystery of the U.S. interest rate cut.
Why is the US dollar slow to cut interest rates? Is this round of interest rates** a success or a failure?
Relying on the strong position of the dollar in the world, the United States has continuously raised interest rates and lowered interest rates in the past few years, creating waves of dollars and frenzied plundering all over the world, and all of this has achieved a huge victory in such a way, so how can we get higher interest rates for Americans?
Some scholars have summarized the six rounds of interest rates in the United States and come up with two basic characteristics.
For Americans, their targets are inflation and unemployment.
High inflation is a signal of potential overheating, while high inflation is a signal. If a country's economy warms up, then interest rates will rise, and if a country's economy falls, then interest rates will fall.
On the one hand, the interest rate hike of the US dollar is aimed at curbing inflation and preventing the danger of overheating, and on the other hand, it is also aimed at curbing the financial crisis in the United States and allowing it to enter a new cycle of development.
For countries other than the United States, higher interest rates would cause currency contraction in the world, a reduction in international trading activity, harm to producers, an impact on currencies elsewhere, and an impact on the world's primary products.
At the same time, with the influx of international funds into the United States, a large amount of money has led to the value of the industry, an economic collapse, and for those highly indebted countries, the depreciation of their currencies will increase their debt burden, and in severe cases, it will trigger an economic crisis.
Then came another round of interest rate cuts, and dollar money went on a rampage to buy cheap assets around the world.
In essence, this is the United States taking advantage of the wave of US interest rate hikes and interest rate cuts to pass on inflation and financial crisis to the world, and while enjoying the fruits of global development, it has reaped global prosperity.
The Americans have won a huge victory in the previous interest rates, and this time, both at home and abroad, they are too far from this goal.
Therefore, both in the United States and abroad, this round of interest rates** will be carried out in an unsuccessful manner.
First of all, in the United States, the US dollar interest rate has been at a high level, inflation has not reached the target, and if the interest rate is slowed down slightly, inflation will start to **. At the same time, the U.S. banking system has sent Wall Street in a difficult position with a barrage of warnings.
With the exception of the United States, this time the increase in interest rates did not attract the attention of other countries, even Argentina, Turkey and other countries were not greatly affected, and Southeast Asia was not greatly affected.
Of course, this country, especially Southeast Asia, will be greatly impacted, because international funds are being lost, resulting in the contraction of international funds, which is also a huge blow to those countries that focus on foreign trade.
However, this time, the US dollar raised interest rates, so that the whole world miraculously survived, the US inflation and fiscal risks have not been fully transferred, and looking at the world, there are not many harvest objects and opportunities.
Then, if interest rates are lowered at this time, then the money in the United States will be siphoned off, and the United States will also be affected, which will trigger an economic crisis, and then a Great Depression.
This is inevitable for the capital-oriented economy of the United States, and the United States, after a series of financial and economic bubbles and crises that have accumulated, has been forced to carry out a forced correction, and if the correction fails, the consequences will be terrible.
In this case, it would be a disaster if these bubbles were not punctured and the funds were not fully utilized.
And with the 2024 ** election comes a fierce political competition, which also adds many dangers and variables to this election.
If the United States had raised interest rates in the past and achieved its own goals, a lot of overseas leeks would have been harvested, and then American capital would have returned to the track of prosperity.
But now, Americans are frightened, for fear that one carelessness will cause huge losses, and they dare not even mention interest rates and interest rate cuts.
If interest rates are to be lowered, they will not be as fast as in the past, they will be very cautious and slowly lower interest rates, slowly, slowly, the economic bubble will be slowly blown open, the crisis will be defused, and then a soft landing will be sought.
That's why Gao Feng expects that even if interest rates are lowered, the rationale will not be so fast.
Therefore, we can boldly expect that at least until the end of the year, the rate cut will begin, and it will be very cautious, step by step, and look at the market's attitude towards it, maybe swinging back and forth between cutting and raising rates.
And this interest rate hike is also a double-edged sword, it can't cut others, it will only harm itself, and now, the whole world is holding high the guillotine in its hand, just waiting for the interest rate reduction of the dollar, you can reap the principal of the dollar.