🔥The interest rate cut is certain, how much it will be cut, we will see tonight! ! ! ! 🔥
The interest rate futures market is pricing in a 67% chance of a 50 basis point rate cut.
Looking back, the exchange rate war between China and the United States has lasted for more than two years. The United States has been raising interest rates, while China has been lowering interest rates. Why has this confrontation occurred? The ultimate goal is to maintain the exchange rate and stabilize the scale of capital outflow, which is to grab money.
Why do we need to protect the exchange rate? Because once the exchange rate collapses, such as the yen, when all assets denominated in fiat currencies will fall, this will lead to foreign capital selling and domestic capital following suit to stop losses. In the current environment, asset prices can easily fall into a death spiral, which is absolutely not allowed to happen.
So when the US raises interest rates, China lowers them. When the US lowers interest rates, China raises them. High blood pressure vs. low blood sugar. This urine-holding competition has finally entered the finals of a life-and-death struggle.
If the rate is cut by 25 basis points, it will be considered as falling short of expectations. There will be a sell-off in the US stock market, especially bank stocks. If the rate is cut by 50 basis points, it will be in line with expectations, and the US stock market will fluctuate slightly, with technology stocks likely to lead the decline. If the rate is cut by 75 basis points, there will be a big problem, confirming that the US economy is in a serious recession, and the US stock market may plummet. Assets will flee from banks and the stock market and flow into the cryptocurrency market to form a rise. This is why people in the cryptocurrency market and A-shares are looking forward to the US rate cut.
Both sides are using the strategy of killing one thousand enemies and losing eight hundred of their own in the battle.
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