What is the market entangled in under the expectations of Federal Reserve rate cuts?
Recently, the financial market has been turbulent, filled with entanglement and uncertainty. On one hand, the potential candidates for the shadow chairman of the Federal Reserve are stirring market expectations; on the other hand, the intensifying expectations for rate cuts, along with the U.S. government's large issuance of bonds continuously draining market liquidity, are intertwining factors that leave investors feeling perplexed.
First, let's talk about the shadow chairman of the Federal Reserve. As the current chairman's term gradually enters the countdown, speculation about the next chairman is rampant. Some candidates considered likely to take over, due to their close ties to the government and unique economic ideas, have raised concerns in the market. If such a person is elected, the independence of the Federal Reserve may be challenged, and the direction of monetary policy may be more influenced by political factors, which undoubtedly casts a shadow over the stability of the market. Investors are beginning to worry whether future monetary policy can still prioritize stabilizing the economy and controlling inflation, or whether it will become a tool for political maneuvering.