I heard Trump wants to press the 'triple-speed rate cut button' for the Federal Reserve, cutting 300 basis points in one go — this seems less like economic regulation and more like spending money in a mobile game to grind for rewards. Unfortunately, reality is not a (currency war simulator); Federal Reserve Chairman Powell will likely smile and hand him a document: (On how the interest rate cuts of the 1970s widened the wealth gap into the East African Rift Valley).
Now global central banks are teaming up for a 'rate-cut carnival', spraying 15 rate cuts in May, making it the 'wildest monetary party of the century'. After hesitating for a month with a small cake in hand, the Federal Reserve finally intends to make the first cut — after all, if they don't start easing, the crocodiles on Wall Street will start gnawing on each other's shoes.
But Trump's 'wishing well operation' exposes a harsh truth: in the wave of interest rate cuts, the ones riding luxury yachts will always be the top 1% (who hold 51% of U.S. stocks), while the bottom 50% are still struggling to inflate their swim rings. The wealth of the richest 0.1% can fit into 5.5 of the bottom half's territory — this is not a wealth gap; it's essentially an economic (Interstellar) black hole!
Market experts are currently sitting cross-legged suggesting: 'Dear, is the wealth gap going to widen? Hurry up and stock up on assets!' — Translated into plain language, it means: 'Since you can't squeeze into the cockpit of the printing press, at least cling to the capitalists' thighs as an ornament!'
In short, Trump's dream of a 300 basis point cut is like a coin in a wishing well: it sounds loud but can't afford an aircraft carrier. The real dilemma for the Federal Reserve is: how to cut interest rates without also 'lowering the dimensions' of social equity? After all, in the script of the 1970s, inflation lost, but the wealth gap won big.
