Click to join the discussion group to answer everyone's questions about interest rate cuts and no cuts, why the reliable ones demand rate cuts, and why the Federal Reserve is reluctant to cut rates?$BTC #黄金白银比特币
During his term, the reliable ones have repeatedly called for the Federal Reserve to cut interest rates, believing that rate cuts can stimulate the U.S. economy, especially against the backdrop of a global economic slowdown and domestic growth deceleration. They argue that rate cuts can lower borrowing costs for businesses and consumers, thus promoting investment, consumption, and a rise in the stock market. However, the Federal Reserve has maintained a cautious stance, refusing to implement significant rate cuts. The reason behind this is that the Federal Reserve's primary task is to maintain long-term economic stability and control inflation, rather than solely pursuing short-term economic growth. Excessive rate cuts may lead to rising inflation or even an overheated economy; therefore, the Federal Reserve focuses more on long-term economic health rather than responding to short-term political pressures.
The benefits of cutting interest rates for the cryptocurrency and stock markets:
Cutting interest rates is usually beneficial for the stock market and cryptocurrency market. First, low interest rates reduce borrowing costs, making it easier for companies to finance, thus benefiting the stock market. Investors are also more inclined to buy stocks, driving the market up. For the cryptocurrency market, a rate cut encourages investors to seek higher return assets; cryptocurrencies, as a high-risk and high-return investment option, attract capital inflows and drive up coin prices.
The impact of not cutting interest rates on the cryptocurrency and stock markets
If the Federal Reserve chooses not to cut interest rates, the stock market and cryptocurrency market may face pressure. High interest rates will increase financing costs, leading to a decline in corporate earnings expectations and resulting in poor stock market performance. The cryptocurrency market may also be affected, as capital outflows could lead to a drop in coin prices, since investors tend to shift funds to more stable traditional markets.
We can understand that the reliable ones are eager for quick success, while Powell is more steady.Join the community discussion
