After the interest rate cut, is the negative impact intensifying? Powell urgently stated: The Fed's interest rate cut will not be rapidly advanced.

Friends, the Federal Reserve, which controls the financial lifeline of the world, has actually cut interest rates! Originally thought this was good news, after all, interest rate cuts mean cheaper loans, and the wallet can be fuller. But guess what? After the interest rate cut, the market was like riding a roller coaster, going up and down, making people nervous. Is the interest rate cut not a good thing? Don't worry, let's first see what Federal Reserve Chairman Powell has to say.

1. The market "soul shock" after the interest rate cut

Interest rate cuts, a term that sounds like a piece of cake falling from the sky in the financial world, have recently caused quite a shock to the market. On September 18, the Federal Reserve announced a 50 basis point interest rate cut, which is the first interest rate cut by the Federal Reserve since March 2020! For a while, the stock market, bond market, and gold market all moved in response, as if they were all looking forward to a new round of financial feast.

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But what was the result? The stock market first rose, then fell sharply; U.S. bond yields were like sliding down a slide, falling all the way; gold also soared for a while, but also quickly calmed down. What's going on here? Is the interest rate cut not good news for the economy?

In fact, the interest rate cut itself is indeed a good thing, it means that the cost of loans is reduced, companies can get funds more easily, thereby promoting economic growth. But the problem is that the background of this interest rate cut is a bit special. The U.S. economy is facing the pressure of "turning", with slowing job growth, rising unemployment rates, and inflation returning to normal target values... These factors are intertwined, making the Federal Reserve in a dilemma between curbing inflation and easing recession.II. Powell's "Anchor of Stability"

Amidst market chaos, Federal Reserve Chairman Jerome Powell made an appearance. His speech at the National Association for Business Economics annual meeting was like an "anchor of stability," instantly calming market sentiment.

Powell stated that the Federal Reserve would indeed continue to cut interest rates at future monetary policy meetings, but would not rush to do so hastily. He emphasized that the Federal Open Market Committee, responsible for formulating monetary policy, would act prudently, allowing data to guide future policy actions. In other words, rate cuts are a continuous process, not something that can be achieved overnight.

This statement immediately provided the market with a sense of reassurance. Investors began to reevaluate the significance of interest rate cuts, no longer blindly following the hype. The stock and bond markets gradually returned to rationality, and market volatility began to subside.

III. The "Profound Intent" Behind Interest Rate Cuts

Interest rate cuts may seem simple, but they actually conceal the Federal Reserve's profound intent. On one hand, rate cuts are intended to address current economic pressures by reducing the cost of borrowing to stimulate corporate investment and personal consumption, thereby promoting economic growth. On the other hand, rate cuts are also a precaution against potential future economic risks. With increasing uncertainty in the global trade environment and rising domestic debt levels, the Federal Reserve needs to provide more economic cushioning through rate cuts.

Of course, interest rate cuts are not without costs. They may trigger the risk of inflation and could impact financial institutions that rely on high interest rates. However, as Powell said, the Federal Reserve will act prudently to maximize the benefits of rate cuts while minimizing their negative impacts.It is worth mentioning that interest rate cuts are also good news for the general public. With the reduction of loan interest rates, the costs of buying a house, purchasing a car, and starting a business will all decrease accordingly. This will undoubtedly stimulate more demand for consumption and investment, thereby promoting further economic growth.

Interest rate cuts, a seemingly simple financial operation, actually conceal countless wisdom and considerations behind the scenes. The timely statement by Federal Reserve Chairman Powell not only stabilized market sentiment but also allowed us to see the profound implications and expectations behind the interest rate cuts. Of course, interest rate cuts are not a panacea; they cannot solve all economic problems. However, as long as we can view the impact of interest rate cuts rationally and make full use of the opportunities brought by interest rate cuts, we believe that our economy will usher in a brighter future.