Abnormal, too abnormal, brothers, something big is going to happen. The big cake rushed to the beginning of 6 in the morning, and here is the reason.
Today, gold broke through the historical high, the three major US stock indexes all opened high and went high, and the currency circle also rose across the board. Everything is too abnormal. Why do all US dollar assets seem to be stimulated by something?
This points to a very abnormal thing behind it, that is, overnight, the probability of the Federal Reserve cutting interest rates suddenly increased from 25 basis points to 50 basis points. Last night, the probability of a 50 basis point cut increased from less than 20% before to 49% today. What happened overnight that made the Federal Reserve change its view?
Nick, a reporter from the Wall Street Journal, who is known as the mouthpiece of the Federal Reserve, published several blog posts in a row, mentioning that the Federal Reserve is now in a dilemma between heaven and man, and whether it should be 25 basis points or 50 basis points is a very embarrassing dilemma.
First of all, in his first article, he said that the Fed is more suitable for a 25 basis point rate cut, which is exactly the same as the market's previous forecast. But then he published another article, which has a completely different flavor. He quoted a well-known market figure, a famous consultant to Powell, who gave Powell a suggestion. He said that since the market predicts that the Fed will cut interest rates by 100 basis points this year, why don't you start with a 50 basis point cut? It will make the US economy improve faster.
So the market was worried that 50 basis points would make people think that the US economy is in recession. Powell just needs to come out and use the method of persuasion to dispel this doubt in the market. Then Dudley, the former third-ranking figure of the Federal Reserve and chairman of the New York Federal Reserve, came out to make a public speech in support of a 50 basis point rate cut.
All this seems to be arranged. I believe that Powell's instructions are behind this. He wants to give the market a test. Does the market agree with a 50 basis point rate cut?
Judging from the market's reaction tonight, a 50 basis point rate cut is quite welcome. But we still need to observe whether the Fed will cut interest rates by 50 basis points next Wednesday.