Looking back at the financial volatility in 2022, when the interest rate was first fine-tuned by 25 basis points, the market was still immersed in the expectation of the fine-tuning rhythm. Unexpectedly, a sudden 50 basis point interest rate hike in May and June shocked the market like a thunderclap, directly leading to the outbreak of major events such as Luna, and market confidence was once frustrated.
Now, when we look forward to September 18, 2024, assuming that the direction of monetary policy begins to turn to easing, if policymakers first cautiously lower the interest rate by 25 basis points once or twice, and then suddenly make a 50 basis point "dive", this is likely to repeat the past panic scene and aggravate the market's recession concerns.
Therefore, the most intelligent and prudent strategy would be to directly and decisively reduce the interest rate by 50 basis points for the first time, giving the market a clear signal that this is a "pre-emptive interest rate cut" measure to prevent an economic downturn. Then, a clear and coherent interest rate cut path map was announced, promising to complete a total of 125 or 150 basis points of interest rate cuts by the end of the year, demonstrating the forward-looking and stable nature of the policy. This approach is like a shot in the arm for the market, allowing investors to quickly adjust their expectations, restore confidence, and promote a rapid and steady recovery of the market.
In this way, the policy not only effectively responds to potential economic challenges, but also leads the market to a brighter future with superb skills and art.