When will the Fed cut interest rates?
Will the interest rate cut bring about an economic recovery?
You've overthought. It's not scary when the Fed raises interest rates, but it's scary when the Fed cuts interest rates.
When the Fed cuts interest rates, it means that the US economy is beginning to decline. As the world's largest consumer market, the US economy is in recession, and it is difficult for the global economy to recover.
Secondly, when the US cuts interest rates, the economy is in recession, and then US bonds become the best investment assets. At this time, not only will the US dollar not be released to the world, but more US dollars will flow into US bonds. After all, it is difficult to find low-risk assets with returns of more than 5% after the US cuts interest rates.
The biggest enemy of the US dollar is gold, but the hidden ally of gold is US bonds. After the US dollar cuts interest rates, the price of gold rises, the US gold reserves are very large, the gold price rises, and the US bond issuance space increases. The US can absorb US dollars by issuing bonds to prevent the outflow of US dollars.
So, will the US economy recover after the US interest rate cut?