The rate-setting meeting is imminent—will a rate hike materialize as the market expects?
Actually, many people don’t think the US will raise rates this time. Employment is doing fine, inflation is doing fine, and commercial loan defaults are also doing fine. The US is simply manufacturing panic.
But you’re overlooking one key issue: the Fed’s determination to suppress inflation. It must push yields down, otherwise no one will buy US Treasuries.
Moreover, over the past few decades, huge amounts of money have been invested every year in building factories and purchasing equipment, seriously impeding the flow of funds.
Put plainly, the tech giants have drained all the funds to build out their operations. This massive, unchecked capital expenditure has pulled all the market’s liquid funds away to buy “bricks and hardware.” And these assets can only be locked up in the short term.
All the money has been overextended, yet the tech giants need even more money for construction. They can only push corporate bond rates to 10%, and soon perhaps even 15% or 20%, to attract more funds.
What can the government and new companies do when they need money? They can only have banks continuously offer high interest rates to attract the funds they need. If banks don’t raise rates, they can only watch the money slip away, so they have no choice but to hike rates to stay in the game. Therefore, the rate hike is also a move made out of necessity—essentially cleaning up after this AI bubble.
Do you think rates will be raised or cut?$BTC #Gate打金狗独家支持0Gas交易
Actually, many people don’t think the US will raise rates this time. Employment is doing fine, inflation is doing fine, and commercial loan defaults are also doing fine. The US is simply manufacturing panic.
But you’re overlooking one key issue: the Fed’s determination to suppress inflation. It must push yields down, otherwise no one will buy US Treasuries.
Moreover, over the past few decades, huge amounts of money have been invested every year in building factories and purchasing equipment, seriously impeding the flow of funds.
Put plainly, the tech giants have drained all the funds to build out their operations. This massive, unchecked capital expenditure has pulled all the market’s liquid funds away to buy “bricks and hardware.” And these assets can only be locked up in the short term.
All the money has been overextended, yet the tech giants need even more money for construction. They can only push corporate bond rates to 10%, and soon perhaps even 15% or 20%, to attract more funds.
What can the government and new companies do when they need money? They can only have banks continuously offer high interest rates to attract the funds they need. If banks don’t raise rates, they can only watch the money slip away, so they have no choice but to hike rates to stay in the game. Therefore, the rate hike is also a move made out of necessity—essentially cleaning up after this AI bubble.
Do you think rates will be raised or cut?$BTC #Gate打金狗独家支持0Gas交易
