If the Fed announces a rate cut as these top forecasting agencies do, what impact will it have on us?
The first one is undoubtedly the exchange rate. If the US dollar cuts interest rates, the RMB will appreciate against the US dollar. RMB assets such as stocks, bonds, and real estate will also appreciate at the same time.
The second is imports and exports. The US dollar rate cut has obvious benefits for our imports because imported goods are cheaper, but it has both advantages and disadvantages for exports. The economy will gradually recover, which is good for our exports, but the appreciation of the RMB will reduce the competitiveness of our exports. For domestic companies with US debt, the pressure to repay debts will be reduced due to the depreciation of the currency after the US dollar rate cut.
Finally, there are obvious positive factors for our domestic stock market or banks and domestic investment and consumption. When the US dollar rate cuts, a lot of funds will flow from US banks to stock markets around the world. At the same time, we also have room for another rate cut, and domestic banks can reduce deposits and increase loans. We can stimulate consumption and control inflation through monetary policy, thereby alleviating the pressure of deflation.
Finally, the appreciation of RMB assets after the US dollar rate cut will attract foreign investment assistance, which will be a great benefit for those growing technology companies in China.
The most important thing is that it is good for BTC, increasing market liquidity, and BTC will rise with it
In short, it is a good thing
