What is the impact of the Fed's interest rate cuts in September, and potentially consecutive cuts in September, October, and December?

First of all, the dollar will return to depreciation. Now that fiscal policy is loose and monetary policy is also loose, economic data is also fabricated, so there are almost no factors to support the currency. The only factor currently supporting the dollar is that Europe is doing worse. We can see the trend of the dollar; Japan and Europe signed unequal tariff agreements one after the other, which allowed the dollar to rebound. However, after encountering fraudulent non-farm data, it quickly fell back. In the future, it is highly probable that the dollar will continue to weaken, which is more beneficial for the U.S. to reduce its debt and restore trade balance.

Secondly, our central bank will also follow suit with interest rate cuts and reserve requirement ratio reductions. The reason for the major policy shift in September last year was mainly due to external conditions from the Fed's interest rate cuts. However, at that time, Powell cut rates by 50 basis points to support Biden's campaign, which greatly exceeded market expectations. But then he saw that Biden's momentum was gone and instead chose not to cut again. This put us in an awkward position. Since our monetary policy shifted to a moderately loose stance, interest rate cuts have actually decreased. The main concern is that the interest rate spread between China and the U.S. is too large. If we cut rates first, all the money will be sucked away by the U.S. Conversely, if they cut rates first, then all the money will flow to us. So it’s a battle of high blood pressure versus low blood sugar; both sides are just wearing each other down. In fact, both sides are in a difficult position. Americans always feel that if they hold on a little longer, their local debt and real estate will explode, while we also feel that if we hold on a little longer, American inflation and its national debt interest will blow up. But in the end, it seems like neither side can explode the other. Our current advantage is that we are relatively unified internally, while the U.S. is in chaos. Trump replacing Powell might actually be a big help for us. Once the dollar tide opens up again, the external constraints on our domestic economy will be lifted. Monetary policy can take over from fiscal policy and manage the economy for the second half of the year.