The hype about the interest rate cut has been heated. Let me tell you what the interest rate cut is and what impact it will have on you. Must-read
First of all, we have to mention a concept, the dollar tide 🌊
Simply put, if the interest rate is high, do you want to deposit money in the bank to make money? If the interest rate is low, do you want to take money out for consumption and investment? This is the dollar tide. The Federal Reserve first uses extremely high interest rates to collect global funds into the Federal Reserve's banks through global interest rate hikes, and the corresponding price is that the Federal Reserve has to pay high interest on the funds attracted from the banks. This is a disadvantageous factor for the Federal Reserve, which is that it needs to pay high interest on these funds. So how does the Federal Reserve make back this interest?