The prelude to spring seems to have quietly sounded, and the prosperity of the big A market is expected to continue. However, at this moment of hope, a black swan suddenly descended, bringing unprecedented shocks to the US financial markets.
The share price of New York Community Bank was in free fall by more than 25% on March 1, and the financial turmoil quickly spread to other regional banks. In the face of this sudden crisis, White House press secretary Karine Jean-Pierre was quick to respond, saying that the U.S. Treasury Department and regulators are closely monitoring the dynamics of New York Community Bank.
The Federal Reserve, the giant ship of the global financial system, is still maintaining a high interest rate policy, trying to attract global capital into the US market, pushing US stocks to record highs. However, behind this prosperity, the bankruptcy crisis of the US banking industry is like a time bomb, casting a shadow on the continued social and economic growth.
The re-emergence of the black swan may force the Federal Reserve to cut interest rates earlier to deal with bank credit risks under high interest rates. Such a move may trigger the risk of great deflation, which is both a challenge and an opportunity for us.
If the Fed cuts rates early, we will be one of the biggest beneficiaries. Interest rate cuts will prompt capital to return to find a safe margin of investment, and China's capital market is currently one of the markets with the lowest valuation and the most margin of safety in the world. The Fed's interest rate cut will undoubtedly attract a large amount of capital to flow into our country.
On the other hand, if the Fed continues to keep interest rates high, triggering the risk of great deflation, although our big A market may be affected in the short term, in the long run, the benefits will outweigh the risks. This may instead be an excellent opportunity for the rise of the big A market.
In this fast-changing market, we need to be vigilant while also seeing opportunities. As the old saying goes, there is always a turning point in a crisis. As long as we can seize the opportunity, we can achieve the ultimate victory in the financial war. ##