The US dollar is about to cut interest rates, is the good life coming?

In recent years, under the crazy interest rate hikes of the US dollar, the world has entered a financial tightening cycle, and everyone's life has been tough.

But now, Federal Reserve Chairman Powell has finally loosened his stance, clearly stating that "it is time to adjust the policy."

According to the CME "FedWatch" data, the probability of the Fed cutting interest rates by 25 basis points in September is 69%, and the probability of cutting by 50 basis points is 31%.

This means that the market believes that the US dollar will definitely cut interest rates in September, it's just that the amount of the cut is not confirmed yet.

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The US dollar interest rate cut is imminent, is the Chinese economy about to take off?

To prevent capital from flowing to China, would the US even go so far as to wage war?

Today, let's talk about these issues.

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According to the US's predetermined strategy, this interest rate hike cycle was actually aimed at China.

Many people may know that under the US dollar interest rate hike, it will cause a global dollar flow back to the US, causing a dollar shortage in the global currency market, leading to everyone becoming poorer and short of money.

China, being a productive country, foreign trade is one of the "three engines" driving our country's economy.

The more abundant external funds are, the easier it is for Chinese products to sell, and the economy will naturally be better.

But perhaps the US did not expect that this interest rate hike cycle not only failed to detonate China's economy but also dragged itself into trouble.

Some time ago, the scale of US debt has broken through 35 trillion, and it is still rising, with no possibility of declining.

With the current level of debt, if high interest rates are still maintained, then just the interest on the national debt alone is enough for the US to have a hard time.

In addition, the US economy is now performing poorly, and signs of recession have already appeared, and the labor market is also sluggish.

The situation is too difficult, and cutting interest rates has become a must for the Fed, which also indirectly announced the failure of this time to encircle China.

Of course, everyone is most concerned about only one question: since the US dollar has started to cut interest rates, is life going to be better?

Is the stock market, real estate market, and bond market finally going to usher in spring?

At the end of last month, Stephen Jen, the founder of the "US Dollar Smile Theory" and the Chief Economist of Morgan Stanley London, predicted that after the US dollar interest rate cut, there will be 1 trillion US dollars of funds flowing back to China from the US, and the yuan will appreciate by 5%-10%.

Stephen Jen's logic is that before the US dollar interest rate hike, due to the high interest rate of about 5%, it attracted a large amount of global funds to flow into the US, and China is no exception.

Now, the US dollar interest rate cut in September is almost a foregone conclusion, and the yuan has already begun to appreciate, which will lead to some conservative funds flowing back to China and starting to lay out in advance.

1 trillion US dollars, according to the current exchange rate, is almost 7 trillion yuan, which is much higher than the 4 trillion economic stimulus funds in 2008.

However, there are two issues here: First, a large amount of funds flowing back, whether for enterprises or individuals, is definitely good news, and life will be relatively better.

However, the direction of the flow of funds is worth discussing.

The big A has been guarding 3000 points every year, will the funds rush to the stock market, and will the two cities usher in a surge?

At present, the real estate market has already shown differentiation, will the funds go to the bottom of the third and fourth-tier cities' real estate market and bring spring?

The answers to these two questions, everyone has a scale in their hearts, and I believe everyone is clear.

Second, the US dollar interest rate cut undoubtedly means that the US financial war this time has failed, and the devaluation of the US dollar has become a foregone conclusion.

A large amount of funds are withdrawn from the US, will the old US turn a blind eye and be indifferent?

In the past few years, in order to maintain the hegemony of the US dollar, the US has done everything possible, from trade wars, public opinion wars to financial wars, all have been used.

Unfortunately, even the financial war that the old US is most good at, it still ended in failure.

With the US style, it is very likely to go to more extreme and crazy choices in the future, which undoubtedly means greater pressure for us, so the situation may not be as optimistic as imagined.

Starting from 2022, the US has attracted global capital back to the US with high interest rates, and now the interest rate cut is imminent, allowing these funds, or even just a small part of these funds, to flow to China, helping China's industrial upgrading and economic recovery, is something the US absolutely cannot tolerate.

To prevent funds from flowing to China, the old US may still have a "Plan B".

For example, further economic blockades against China.

Although the speed of de-dollarization and internationalization of the yuan has been accelerated in recent years, at present, the hegemony of the US dollar is still solid, firmly controlling the global economic lifeline.

Once the US threat comes true, if we are really kicked out of the US dollar payment system, it will have a serious impact on our trade settlement.

It is precisely because of this that this year we are vigorously promoting the establishment of a new payment system by BRICS countries, trying to completely get rid of the current hegemony of the US dollar.

For example, creating conflicts, using the nature of capital to seek profit and avoid harm.

The principle is very simple, the reason why capital will flee the US is largely due to a lack of a sense of security, and urgently needs to find a new "safe haven".

But think about it, if China's economy stagnates and there is continuous turmoil around, will it still attract capital to flow back?

So in such a big background, in order to fully prevent funds from flowing back to China, the US may do everything possible, and the future situation is likely to become more tense.

However, now that the trend of capital flowing back has been formed, and the yuan exchange rate has been rising for several days, whether the old US "Plan B" can be effective is still unknown.

In conclusion: In the end, what needs to be said is that the capital flowing back to China, many people worry that it is the old US "conspiracy", which is ready to come to China to bottom fish, and to buy high-quality assets.

But in fact, such concerns are unnecessary.

In some strategic key industries, we have absolute say, and appropriately relaxing restrictions on foreign capital is actually beneficial to stimulating economic vitality, and life will be a bit better.