The Fed's rate cut has now become a "mystery drama" for global investors. The latest exposed meeting minutes show that there has been a huge debate within the Fed—although most officials believe rates should be cut this year, there is a heated debate over when and how much to cut. This is not just an ordinary policy discussion; it directly affects each of our wallets.
When the Fed loosens its grip, the global money bags will all shake a bit. It's like the main water valve in your neighborhood; if it's opened wider, your home’s water pressure increases; if it's tightened, the whole building has to conserve water. The Fed is now like a conflicted chef: if the heat is too high, the dish might burn (inflation), and if the heat is too low, the dish might be undercooked (recession), with diners (politicians) constantly urging for the dish to be served. The latest data shows that while the unemployment rate looks okay, finding a job has clearly become harder, and prices haven’t really come down.
The Fed's decisions are like weather forecasts—something to reference but not to fully trust. What we need to do is prepare our "umbrellas" (risk hedging) and "sunscreen" (profit protection), and not wait until the storm comes to remember to fix the roof.