The Federal Reserve's decision to cut interest rates has sparked widespread controversy. Powell has dragged the rate cut window, which should have started in June, into a passive situation. At that time, the Chinese stock market was in a critical bottoming phase, the U.S. labor market was showing signs of fatigue, and inflation levels were still within a controllable range. At this time, a moderate easing policy could provide a buffer for the U.S. stock market and seize the window for valuation recovery in emerging markets. However, the decision-makers deliberately delayed action, attempting to observe whether there would be systemic risks in the Eastern real estate market while also using the policy rhythm to delay the impact on the election process, ultimately missing a strategic opportunity—the Chinese capital market stabilized and recovered first, while U.S. employment data continued to deteriorate, resulting in a dual divergence between policy lag and market expectations.

Currently, the Federal Reserve is in a dilemma: if it accelerates rate cuts, it may trigger international capital flows to emerging markets. Considering the strong momentum for valuation recovery in Eastern stock markets, coupled with the $24 trillion debt burden under the 4.5% benchmark interest rate set by the U.S. government, there is a risk of inducing a trend reversal of 'East Rising, West Falling', which could impact the stability of the U.S. stock market, U.S. bonds, and the dollar system. Conversely, maintaining high interest rates will exacerbate the rising pressure on corporate financing costs. The unsustainable weakness in the labor market will eventually transmit to the financial system, while the U.S. stock market lacks the supportive foundation for sustained upward momentum. The loose environment that the U.S. economy previously relied on is likely unsustainable, and policymakers are facing the test of a historic choice.

In this situation, Old Wang had already anticipated this in the broadcast room, but did not expect it to happen so quickly, or for this wave of decline to come so suddenly. In the short term, we not only need to consider the technical aspects but also how market sentiment is behaving. We need to cautiously position ourselves and strictly enforce stop-loss measures. $ETH #美联储降息预期