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Some partners don't know why they want to cut interest rates?
What are the disadvantages of a rate cut?
Hello everyone, I am Dehui's Juxing, today to share with you, before sharing this topic, first talk about the American economic system, they themselves belong to the open economy, but also belong to free capitalism, there is no plan to expand production capacity, generally prefer to consume ahead, supply exceeds demand, their credit cards are in advance consumption, not longing deposits.
Why cut interest rates ❓
Interest rate cuts can stimulate the economy, and Central Bank will adopt interest rate cuts to stimulate consumption and investment relations, thereby boosting economic activity. By drop the deposit Interest, residents can be guided to use their funds for consumption or investment instead of depositing them in banks, and at the same time, drop loans Interest which means that businesses can raise funds at a lower cost, thereby increasing investment and production activities. These measures will help boost employment, expand consumption, and promote economic recovery and rise. So in the process of cutting interest rates, there will generally be a bull market in the crypto world!
What are the undesirable outcomes ❓ if interest rates are not cut (disadvantages)
If interest rates are not cut, then the U.S. economy will have stagflation, and interest rate hikes can not improve Inflation, just like in 2022, their assets will be ugly if they are not picked, resulting in insufficient collateral, bank bankruptcy, Silicon Valley Bank signature, etc. will have problems one after another, and will also face the problem of debt default, if interest rates are not cut for a long time, employment will deteriorate, the published data is ugly, large companies will lay off employees, especially when it is time for the election, so the possibility of the Fed cutting interest rates will be greatly enhanced!
What are the good outcomes ❓ (benefits) of a rate cut?
If the interest rate is cut, more long people can take out bank assets, increase Liquidity, and let more long people buy various assets gold, silver, including BTC crypto world, so that Bull Market will be ushered in, promote consumption and investment, and be beneficial to the development of the stock market and the bond market. Interest rate cuts may lead some funds into the stock market and other venture capital areas, real estate, finance, etc.!
I'll share it here for you today! !️
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