Let's put it this way: its influence far exceeds what most people imagine, and it cannot be underestimated.
Don't believe it? Let's review some real cases that happened in recent years:
In 2020, the pandemic broke out, and the U.S. stock market experienced several circuit breakers. After the Federal Reserve's emergency interest rate cuts, the stock market not only stopped falling but also rebounded strongly, rising all the way. The A-shares also followed suit, starting from 2650 points and rising to 3700 points in a year.
In those two years, China's economy also performed strongly. In 2020 and 2021, many people felt job stability and income growth, and the market atmosphere was positive.
However, at the end of 2021, the Federal Reserve signaled interest rate hikes, and the A-shares peaked in response, falling from 3700 points to 2900 points in four months. Throughout the entire interest rate hike cycle, the A-shares remained under pressure and showed weak performance.
At that time, the Chairman of the Federal Reserve bluntly stated that 'anything is possible during the interest rate hike phase.' In fact, the interest rate hike not only impacted the market but even indirectly contributed to heightened international tensions (such as the Russia-Ukraine conflict).
If it weren't for the buffering effect of the Chinese economy in the middle, the global impacts could have been greater.
Over the past three years, the high interest rate environment has caused many people to feel the pressure.
Until September of this year, the Federal Reserve began to cut interest rates, and China quickly launched a series of favorable policies. The A-shares experienced a strong rebound, rising about 1000 points over six trading days, referred to by the market as the '924行情'.
Now, after pausing interest rate cuts for 9 months, the Federal Reserve has once again signaled easing. Although it is difficult for the market to replicate the previous '924行情' surge, a recovery similar to that from late June to the end of August this year is still worth looking forward to.
Therefore, my personal judgment is that from late September to early October, the A-shares are expected to initiate a new upward trend. In the next two to three years, as the effects of policies gradually become apparent, the Chinese economy is expected to bottom out and recover, and ordinary people may also look forward to a period of relatively improved economic conditions.
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