The next biggest event in the world will be the Federal Reserve’s 918 interest rate meeting, or to be exact, at 2 a.m. Beijing time on September 19, when the latest U.S. dollar interest rate will be announced, attracting worldwide attention.
I just checked the betting website and found some changes. The probability of a 50bp rate cut is currently 49%, while the probability of a 25bp rate cut is only 51%. These are the probabilities that gamblers have bet on with real money, and the pool currently contains $45 million.
Among the big institutions, Morgan Stanley insists on a 50bp cut, while Goldman Sachs insists on a 25bp cut. There are still some differences between the institutions. If you look at the odds above, the gap is not very large, and it is a meeting with a lot of suspense. Because of the suspense, the market cannot price in expectations in a stable manner in advance, which means that whether it is 25bp or 50bp, it is likely to have an impact on the global financial market in the short term. As for whether it is a good impact or a bad impact, we will only know it in the early hours of Thursday.
The Fed's interest rate cut is a positive development that we have been waiting for for two years. It is finally coming true. The Fed will cut interest rates by about 3% in the next two to three years. Most currencies in the world will also follow suit. This gives the RMB a lot of room for maneuver. Our central bank can also follow suit and cut interest rates without worrying about exchange rate pressure. For example, the interest rates for existing mortgage loans have been reported two or three times this month. By then, it is estimated that there will be a result.
I think the average interest rate of existing mortgage loans should be reduced to the range of 3%-3.5% to be reasonable, and the interest rate difference with new mortgage loans should not exceed 0.5%. This will indeed impact the profitability of banks. There is no other way. At that time, we can only make depositors suffer a little more and ask them to lower their deposit interest rates a little more.
Some readers have asked before why banks should lower interest rates, as this violates the contract. Have you read the report I posted last night? The number of houses for which mortgage payments have skyrocketed. If interest rates are not lowered, all the houses will rot and be left for banks to dispose of. The banks will be in great trouble.
