After listening to the Space speeches of several big guys tonight, the main content of the discussion in the second half was about the difference between a 25% or 50% interest rate cut and the market effects it has brought.

Several big guys expressed their opinions, which was very beneficial. However, on this topic, I might express my humble opinion from my perspective.

First of all, monetary adjustment is an inevitable economic path in the economic cycle, and it will also trigger obvious economic changes, which may be subtle or extremely obvious.

In an environment of high interest rates, economic growth is gradually slowing down and pressure from all sides is increasing. This is basically a sign that the economy is "sick". So at this time, the good medicine of "interest rate cuts" is needed to adjust the economy so that the sick economy can safely pass through the "dangerous period" and then grow healthily again.

A 25 or 50 basis point rate cut is like the "dosage" issue for taking a drug for the first time.

The 25 basis point rate cut is a conservative and steady "dose". Although it is not easy to be effective in one shot, it is safe. It can be observed according to the subsequent condition and the sensitivity to the "drug", and then the dosage can be increased or reduced in the subsequent treatment. This method is both conservative and stable.

A 50 basis point rate cut is a strong version of increasing the “dose”, and the effect is better than a 25 basis point rate cut. The economy will be greatly relaxed and boosted in the short term, and it may even make the “disease” disappear directly, and the patient will get out of bed and do “radio gymnastics”. This is why so many people advocate or are optimistic about a 50 basis point rate cut.

However, all medicines are toxic. Large doses of medication can make the "patient recover faster", but the patient's condition is more complicated. His own antibodies, pathogens, allergies, and rejection are not clear enough and are prone to change. Large doses of medication can also cause potential "conditions" to worsen, and may even lead to short-term "critical illness".

More likely, under large doses of stimulation, the originally calm immune system will be activated, causing complications or even irreversible damage.

Let's look at the patient's current condition:

I have discussed this topic with Frank before. Governing a large country is like cooking a small fish. What is needed is not extremely good taste, but a balance and fusion of various flavors to present a good dish.

As for the United States currently, it is facing a sensitive period of general election in November. At the same time, its own global dominance has been weakened, and the third globalization it leads is also facing doubts from all sides.

The current US economy is like a patient with potential complications. If the medication is too strong, the probability of saving or losing life is actually not small. Of course, the loss of life here is just to describe the crisis and risk itself.

Personal opinion:

Personally, I am more inclined to expect a 25 basis point rate cut, because the current "condition" is actually somewhat special, and the focus of treatment at this time is stability, rather than direct effectiveness.

Moreover, for the risk market, interest rate cuts may be accompanied by risk aversion and market correction in the subconscious of many people. However, once the interest rate cut is implemented, the first cut of 25 basis points will make the market reaction more stable, whether it is a decline and correction or a subsequent rebound.

Moreover, if some economic data have problems again, the market can be appeased by a larger "medicine" interest rate cut. If the interest rate is cut by 25 basis points and the economy has problems, the market can be adjusted to expect that a 50 basis point interest rate cut will save the problem. However, if the interest rate is cut by 50 basis points for the first time and problems arise again, and then a larger interest rate cut is made, it will trigger more malicious speculation.

#BTC☀ $BTC