Many people are entangled in whether to cut interest rates by 25 basis points or 50 basis points. In fact, the real intention is not 25 or 50, but they want to see the managers' views and countermeasures on the current economy from the interest rate cut policy, so the following views have emerged:
Cut the interest rate by 25 basis points: It means that the current economy is only temporarily slowing down, and the problem is not big. Just continue in the previous way. Of course, if you are not careful, you may use too light a medicine, which will not solve the actual problem and delay the symptoms.
50 basis point rate cut: the economy has problems, and drastic measures are needed. The current situation is very bad.
No rate cut or rate hike: very unexpected. It is possible that the previous data was falsified, or as some people think, they want to kill a certain Eastern giant. Both sides will suffer. It is definitely bad news.
Rate hike: Same as above, similar to no rate cut or rate hike, but this medicine is more drastic.
Summary:
In any case, rate cut is the only way to change the current situation. From March at the beginning of the year to now, there has been no rate hike or rate cut for several times, which shows that the market is not optimistic about the path of rate hike. On the contrary, rate cut is what everyone wants. The main problem now is how to adjust everyone's expectations after the rate cut, which is the key. That is, in addition to this string of numbers, we must also deduct the meaning of other words word by word, so as to ensure that we can truly understand the management's views on the economy and its predictions for future policies.
