Don't be foolishly excited about interest rate cuts! The Fed's misstep could lead to a major downturn for investors! Mr. Jin reveals the secrets in advance!

Interest rate cuts = Bull market start? Don't oversimplify the market!

Whenever expectations for interest rate cuts rise, there are always those who shout, "The market is coming!", but investing has never been a black-and-white arithmetic problem. The Fed's interest rate cut in September is almost a consensus in the market, but the key is not whether to cut, but how much to cut—25 basis points or 50 basis points? The signals behind these are vastly different.

If a one-time cut of 50 basis points occurs, the market might interpret it as a significant risk to the economy, and panic could trigger short-term sell-offs. Even a conventional 25 basis point cut may not immediately boost the market; the transmission of policy takes time and is definitely not an instantaneous "magic trick."

Currently, the probability of a moderate cut of 25 basis points seems the highest. Unless economic data deteriorates sharply, the Fed is unlikely to easily resort to a large cut, which acts as a "stimulant." At this stage, while the U.S. job market shows signs of weakness, it is not out of control.

In addition, investors need to pay attention to two deeper signals: the dot plot's guidance on future interest rate paths and whether the balance sheet reduction process has truly stopped. Only after confirming that the easing cycle has fully begun can the market potentially welcome a real trend.

In the long run, interest rate cuts are indeed beneficial for the market, but short-term fluctuations are often driven by emotions. Never be swayed by those statements of "all in, financial freedom"—investing is a marathon, not a gamble.

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