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The sky is falling, the market is crashing, the Block chain is killing! Is Powell going to destroy the Bull Market? Let me tell you, it's all just a smokescreen, the best golden period for picking up passengers in reverse!
After the speech by Fed Chairman Powell last night, the market experienced a major crash! Despite the announcement of a 25 basis point rate cut, why did the market mourn? The reason is that the median of the dot plot has risen to 3.9%. The dot plot is the forecast of the Fed officials, with each person making a judgment. This means that if this expectation holds next year, only two more rate cuts will be needed. What does that mean? It means that the subsequent rate-cutting market will not continue, the expected substantial easing will also be gone, and there will be no money next year. The market suddenly became pessimistic.
So why is all this said to be a smokescreen?
In fact, during the previous bull run, these guys at the Federal Reserve liked to do this! And the logic was mentioned in the previous article. They would quickly cut interest rates to a suitable level. Because you Americans are going to inject liquidity into the market, institutions smell the scent and quickly enter the market to devour this growing cake. For their own interests, they definitely can't let you make such easy money. Suddenly, a unexpected dot plot comes out, affecting market expectations. They just don't want you to keep enjoying it. Speaking of this dot plot, it's just a prediction. How accurate is it? It's all internal staff, they can easily modify the data and release it to shake the market, just to firmly grasp the initiative. Don't be confused by this kind of news, it's just a way to wash people off the car, so rest assured!
Next January, Trump is about to take office. Trump's policies include reducing taxes, lowering inflation, supporting cryptocurrencies, strengthening the dominance of the US dollar, and making America great again. Making America great again, Trump will definitely take bold actions, and interest rates will certainly decrease. Quantitative easing will also come as scheduled. This is the sharp political sense of a seven-year-old investor. What's more likely is that Powell is intentionally doing this, actually secretly helping Trump ascend to the throne. Just like how 'Biden' helped Trump in the past, pledging allegiance.
So do you know why Powell is doing this?