Don't be fooled by Powell.

The Fed made the decision to cut interest rates not because of inflation in the United States, but to lure central banks of other countries to follow the Fed's interest rate cut and jump into the trap.

But unexpectedly, after the Fed unexpectedly cut interest rates by 50 basis points, the UK did not cut rates, and Japan did not raise rates. Many countries did not take any action, which surprised the United States.

Now, the year-on-year CPI growth rate in the United States is 2.4%, which is 0.1 percentage point lower than 2.5% in the previous month.

Doesn’t this mean that inflation in the United States is indeed under control?

This was the smallest increase since February 2021, but was actually still above the long-term inflation target of 2%, and the growth rate of 2.4% was a little worse than expected.

Simply put, the US inflation data has not yet reached the interest rate cut target set by the Federal Reserve, nor has it reached the expected value.

We have further determined that not only has inflation not declined, it may continue to rise.

Because strikes have occurred in many industries and many places in the United States, the only solution is a wage increase. Taking the dock workers' strike as an example, which resulted in a 62% wage increase, it is estimated that the wage level in the United States will rise significantly in the future.

How can inflation be stopped under such circumstances?

The inflation data is fake, and the employment data may also be fake.

The employment data for the past year was falsely increased by 818,000, while the latest non-farm employment suddenly increased to 254,000. How can this not arouse suspicion?

Lowering interest rates typically reduces the cost of money, stimulating borrowing, investment and consumption, but it can also increase the supply of money in the market, triggering inflation.

Under such circumstances, the Federal Reserve may not cut interest rates in November, and Powell’s attitude now makes the market feel very confused.

It is difficult to determine the quality of the U.S. economy in the short term during the Biden administration, but what is certain is that the time has come for the United States to change.

Considering the impact of the United States on the global economy and the international status of the US dollar, whether the Federal Reserve cuts interest rates will not only affect the United States, but will also have a profound impact on the global economy, especially for those countries that are deeply involved in the global economy.

For China, the most direct impact of the Fed’s interest rate cut is the change in the circulation of the US dollar.

In the short term, the RMB exchange rate against the US dollar may fluctuate to a certain extent, but in the long run, due to China's huge and growing trade surplus, if there are no major changes, the RMB exchange rate against the US dollar will truly break through 7.0.

Many people are worried that the appreciation of the RMB will affect our exports. This is indeed reasonable, but if we work hard to increase trade with countries such as the Belt and Road Initiative and ASEAN, and work hard to use the local currencies of both sides, especially RMB, for settlement, and reduce the use of US dollars for settlement, then we can minimize the impact of the appreciation of the RMB.

At the same time, the appreciation of the RMB will help increase its attractiveness to central banks of various countries and increase the share of the RMB in foreign exchange reserves.

So we don’t need to worry too much, we can turn disadvantages into advantages through our efforts.