Analysis: The Federal Reserve may make emergency rate cuts to stifle the feedback loop, and the rate cut may be larger.
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Odaily Odaily analyst Simon White said that the Fed's official mission is to solve unemployment and inflation problems, but in reality, its job is to prevent a "feedback loop" between the market and the real economy, which, if not controlled, will lead to a recession. The U.S. economy looks no different than it did last week, and a recession has become more likely precisely because positions have caused the market to raise expectations for a recession. The Fed cannot save an economy that is already in recession by cutting interest rates and adjusting its balance sheet, but if it can nip the cycle that leads to a recession in the bud before it forms, it may be able to get the economy out of recession, which is why an early rate cut is a possibility that cannot be ignored. In fact, the possibility of a rate cut of 50 basis points or more will also rise, because in this case, if the rate cut is really made, the probability of a larger rate cut will be higher. (Jinshi)
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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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