Whale briefly analyzes the key points,
"What will happen after the interest rate cut"
Every interest rate cut in history, especially the first interest rate cut, has brought about a relatively deep decline in the financial market.
When the third interest rate cut began, the financial market effect came out. The reason for this is very simple. In plain words, the flow of funds takes time, and the market also needs time.
In addition, the most important thing about the interest rate cut is that the US's most adept QE policy, simply put, is "flooding the market", which is the so-called quantitative easing policy!
Usually, the most familiar means we are most familiar with is to raise or lower interest rates, and another is to adjust the bank's reserve ratio. QE is a third more special method, which directly buys government bonds and investment-grade asset-backed bonds through market intervention. Through large-scale purchases, bond prices rise and bond yields fall, thereby forming a loose effect. In fact, quantitative easing in a popular sense means printing money. Let the Federal Reserve buy the bonds issued by the Ministry of Finance, and then the money will be derived. Of course, as a global reserve currency, the consequence of printing money is to export inflation to the world, and the whole world will pay for it.
This is why commodities have risen several times after the start of QE, because it represents a bigger bubble! There is more money in the market, but the commodities or products have not increased in essence, and the debt will also reach a new height.
