According to BlockBeats, on November 4, veteran Wall Street analyst Bill Blain stated that while households and companies may breathe a sigh of relief with lower borrowing costs, they should not feel relaxed, as interest rates and inflation are expected to remain high, a reality that could trigger a significant downturn in the stock market next year.
Brian, the long-term strategist and head of Wind Shift Capital Advisors, stated that he expects the stock market to experience turbulence over the next 12 months. This is because the Federal Reserve is unlikely to lower interest rates to very low levels as the market believes, and borrowing costs may indeed rise from now on. This could suppress lending, slow down investment, and lead to a 7%-12% decline in U.S. and global stock markets.
"I believe the crisis we face is that when interest rates start to rise, the government will not be able to continue to stimulate the economy in a rising interest rate environment because they have already lost market support," Brian said.
Brian's prediction may seem counterintuitive to investors who have been pricing in significant rate cuts by the Federal Reserve. However, he stated that the U.S. economy faces too much inflationary pressure in the medium term to guarantee that the Federal Reserve will adopt aggressive easing policies. (Jin Shi)