Fed Cuts Rates: What's Next for Our Economy?

It is widely known that the Federal Reserve has initiated a rate cut mode, with the first cut being 50 basis points.

Whether it will continue to open a rate cut channel in the future remains to be further observed.

Now that the rate cut has been implemented, regardless of how much it is reduced or whether the other party's interest rates remain high, the Federal Reserve has indeed cut rates.

So, does this round of rate cuts really form a significant positive for our economic situation?

I guess many people are most concerned about the stock market and the real estate market.

So, how has the stock market been feeling since the rate cut two days ago?

It should be said that it is gradually improving, and some real estate stocks have seen two big bullish candles.

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But it should be noted that these stocks have already been oversold, and even if they rise strongly, for many stockholders, it is nothing more than a price correction.

Moreover, our market is a financing market.

Over the years, listed companies have only been concerned with going public and financing.

As long as the financing is successful, the remaining stock price trends, dividends, and so on, seem to have little common driving interest with the listed companies.

Therefore, there have been many financial frauds and stingy companies in the past.

Our country is also trying its best to change this situation.

However, whether the stock market will be optimistic in the long term, for now, ask yourself, are you optimistic?

Next, let's discuss the real estate market.

Speaking of the real estate market, this leads to investment.

Specific economic prosperity is not just investment + consumption, right?

In recent years, our country's real estate, infrastructure investment, and so on, the expected return rate seems not as hot as before.

This has also increased the economic burden, with a large scale of local debt and heavy debt.

The dollar rate cut, and everyone may hope that some of the dollar capital will flow back to nourish our domestic economy.

This is still related to investment, and everyone hopes that these dollars outside will gradually flow back.

However, we are a country with foreign exchange control, which is not the same as other countries in the world, where foreign exchange can be freely exchanged.

So the hot money effect that everyone expects to see has almost no chance of happening.

The investment we have roughly said, let's take a look at consumption.

Since the three-year epidemic, followed by the U.S. interest rate hike, most of the middle and high-end families have chosen to go abroad, and have also taken away a part of the wealth.

And the real bottom people, basically the money bag has turned upside down, no money.

If you don't believe it, you can pay attention to the M1 and M2 indicators released by the central bank.

M1 roughly represents the existing cash in circulation and demand deposits.

M2 can be roughly understood as various types of deposits.

Our M1 is decreasing, and M2 is increasing.

These roughly mean that the people have no money, and even if they have money, they dare not spend it, and it is safer to deposit it in the bank.

There is also a reduction in salaries within the entire system, and even a 50% discount, which is a negative factor in boosting consumption.

Everyone is already afraid to consume, and does everyone still have the heart to buy a building?

Whether the real estate market will be optimistic in the future, at least in the short term, it seems to have nothing to do with the dollar rate cut and the flow back.

However, if the Federal Reserve can continue to cut interest rates in the future, it will ultimately be a big positive.

But all kinds of funds are coming in to talk about returns, and if the investment does not see a return, then no one dares to invest.

We also face a big problem in the surrounding situation, that is, the export situation is not very good.

Apart from the export growth to Russia last year, which increased by 50.2% year-on-year, the overall export to European and American countries has declined.

This is due to trade wars and other reasons caused by Western countries, leading to poor foreign consumption.

Domestic and foreign consumption is not strong, which is the main reason affecting the economy.

Moreover, many people in the country are still carrying high mortgage loans, which makes people dare not consume and dare not bet on tomorrow with today.

Although it is said that the interest rate of existing housing will be reduced soon, and a series of liquidity releasing plans will be introduced.

Then I hope that in the near future, the plan to stimulate the economy will come a bit more fiercely.

In short: 1.4 billion people in China want to rely on external factors to boost the domestic economy, and it is difficult to achieve in the short term.

It can only be said that the dollar rate cut is a positive factor, but not a decisive factor.

To forge iron, one still needs to be strong.

If you want the economy to recover and turn for the better, you still need to rely on the wisdom of the working people, as well as a series of economic stimulus plans issued by the country in the future, benefiting the common people.