It was said before that the interest rate would be cut by 25BP. Well, the "interest rate cut" exceeded expectations. Come on, stand in the corner and curse.

In the early morning, the Federal Reserve "cut interest rates" beyond expectations. My evaluation can only be described in four words: "amazing". I can only say that they have played the expectation management very well. Explain from the perspective of economics. Since you do not admit the recession and believe that the economy is full of momentum, then you should cut it a little bit, slowly release the pressure, and let the growth and pressure offset each other, in order to achieve the goal of moderately reducing inflation. This is what they said in the process of raising interest rates in the past. But the result is that the rate was cut by 50 BP at the beginning. Since a more radical stimulus action was chosen, it is to prevent the signs of economic recession in advance. But if we look at the dot plot, except for a certain room for interest rate cuts in 25 years, the Fed believes that the interest rate should stay at around 3.4% in the next three years. It needs stimulation, but also needs to control costs. Listen, doesn't it mean that you want both? Free America, are you starting to act like a hooligan? ....

How to interpret this action? First of all, the hands admitted that there was a recession, and the interest rate was reduced by 50 BPs, and it was controlled to nearly 4 within the year. In addition to the influence of votes, the pressure of 35 trillion US debts was there, and it must be reduced. What needs to be paid attention to here is Nvidia. If the industry can really drive economic growth, it does not need to cut interest rates. The feedback is that the AI ​​bubble is no longer enough to support the "American Dream". Then, you can't let the money run too fast. The meaning of the dot chart is that the US debt interest rate will be above 3.5% in the next five years. This means that it will be loosened, but it will not be completely released. The long-term return of more than 3.5% is still very high for industrial capital, that is to say, there will not be a lot of money chasing risky assets. This has become a story of paying protection fees. The US stock market is already very high, and now the bubble is at risk of bursting. What should I do? Pay a 3.5% cost to prevent money from flowing to opponents.

As for whether the funds will listen or not, we will discuss this separately. The conclusion is obvious.

The Federal Reserve is abandoning Nasdaq and directing funds to U.S. Treasuries.

The reason for controlling interest rates is also very clear. If the interest rate target is set very low at one time, a large amount of capital will be sold off US debt, and no one will take over US debt in the future. This will cause systemic risks in the banking industry, and it will be impossible to borrow new money to repay old debts. Therefore, Da Piaoliang is stepping down. First, it will take 5 years to reduce the debt interest rate from 5% to 3.5%, and then another 5 years to reduce 3.5% to below 2%.

Ten years later, growth exceeds debt, and the pressure of US debt is resolved. Hey... It sounds familiar... Isn't this L-shaped growth, the lost 20 years? ... To borrow a sentence from yesterday's comment, "We won again." What the hell, this is an attack and defense anomaly, the blogger's mouth is really powerful! For such friends, remember, someone has interpreted the Fed's interest rate cut for you like this. ----Rapid short-term interest rate cuts, but maintaining long-term interest rates.

This is actually a gesture of handshake and peace, indicating that both sides are no longer seeking to kill each other. They want to jointly enter the "L-shaped growth" of exchanging time for debt. At least, for now, both sides are in this posture. So, think carefully about what will explode.