The recent Fed meeting has caused quite a stir in the market. In the end, they decided to cut interest rates by 50 basis points, and they also expect to cut another 100 basis points this year and another 100 basis points next year, and the interest rate may drop to 3.4%. What is the meaning behind this? Let's have a good chat.

First of all, not everyone agrees on this rate cut. Board member Bowman voted against it, and she thought that a 25 basis point rate cut would be enough. This is the first time in more than two years that there has been a difference of opinion. The Fed mentioned in its statement that job growth has slowed and inflation risks have begun to balance, indicating that they have reassessed the economic situation.

Let's look at the data. The Fed expects interest rates to drop to 4.4% by the end of this year and to 3.4% next year. The unemployment rate may rise, and may rise to 4.4% by the end of the year. As for inflation, there is hope that it will return to 2.3%. Powell also emphasized that this rate cut was not because of any major problems in the economy, but to "re-adjust" policies to adapt to the current economic situation.

Let's talk about the Bank of Japan, the situation is also quite delicate. Although most people do not expect them to raise interest rates, Japan's wage levels have risen recently, which may provide some support for future rate hikes. However, investors should not take it lightly. The Japanese economy has been trying to find a balance between economic growth and inflation, which may bring some volatility to the market in the future.

As for the US stock market, a recent report by JPMorgan Chase pointed out that the annualized return rate of the S&P 500 in the next ten years may be only 5.7%, which is much lower than the historical average. The main reason is that the current stock market valuation is too high. In addition, factors such as aging, economic fluctuations, geopolitical risks and de-dollarization will bring challenges to the future market. In addition, the increase in government bond issuance may also push up yields and compress stock valuations.

But although there are many challenges ahead, technological advances, especially the development of artificial intelligence, may greatly increase the profitability of companies, which is a good thing for future market returns. Therefore, investors should not only focus on the current high valuations, but also see the potential positive factors.

In general, the future market is full of uncertainty, and everyone must remain vigilant and have a reasonable expectation of the returns of US stocks.Pay attention to the policy trends of the Federal Reserve and the Bank of Japan