[Powell's rate cut ≠ Bull market begins]
Many people believe that a rate cut is a signal to enter the market, but history has long told us that the beginning of a rate cut often marks the start of a bear market.
⸻
History has verified this:
1️⃣ The tech bubble in 2000:
• The Federal Reserve reduced from 6.5% to 1.0%, continuously cutting interest rates for 30 months.
• However, the Nasdaq plummeted -78% from its peak, with the bear market lasting nearly 3 years.
2️⃣ 2007 Financial Crisis:
• The Federal Reserve lowered from 5.25% to 0.25%, cutting rates for a full year and a half.
• The Dow Jones still plummeted over -50% during the rate cuts.
⸻
Why lowering interest rates does not equal a bull market?
Because:
Lowering interest rates = admitting that the economy has encountered problems.
⸻
History has verified this:
1️⃣ The tech bubble in 2000:
• The Federal Reserve reduced from 6.5% to 1.0%, continuously cutting interest rates for 30 months.
• However, the Nasdaq plummeted -78% from its peak, with the bear market lasting nearly 3 years.
2️⃣ 2007 Financial Crisis:
• The Federal Reserve lowered from 5.25% to 0.25%, cutting rates for a full year and a half.
• The Dow Jones still plummeted over -50% during the rate cuts.
⸻
Why lowering interest rates does not equal a bull market?
Because:
Lowering interest rates = admitting that the economy has encountered problems.
- Corporate profits have begun to shrink.
- Employment data is beginning to deteriorate.
- Market confidence is rapidly declining.
The Federal Reserve is only now forced to cut interest rates to save the situation, rather than to bring about prosperity.
⸻
The current situation is the same:
- Inflation in the USA remains stubborn.
- High tariffs have just been implemented, and PCE and unemployment rate have not fully reflected the impact.
- The global supply chain has not stabilized yet.
- Corporate profit pressures are about to emerge.
Even if Powell starts lowering interest rates in the future, it is likely just to prolong the "buffer period" of the bear market, certainly not the starting point of a bull market.
⸻
A true bull market requires:
✅ Macroeconomic stability
✅ Controlled inflation
✅ Corporate recovery and growth
✅ Confidence in funds is returning.
Even if Powell starts lowering interest rates in the future, it is likely just to prolong the "buffer period" of the bear market, certainly not the starting point of a bull market.
⸻
A true bull market requires:
✅ Macroeconomic stability
✅ Controlled inflation
✅ Corporate recovery and growth
✅ Confidence in funds is returning.
By Ryan Kim (Reincarnated)
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Prophet26 : Even though I think USA is on the down long term, your information is not comprehensive and thus misleading.
FFFFFFFFFFF : The domestic interest rates have been decreasing, could there be a potential crash in the future?
轉生成最廢資本家 OP FFFFFFFFFFF : I am not from China, but the Chinese government has implemented Algo easing and interest rate cuts, so the stock market should hold up for now. Historically, if the USA stock market experiences a significant drop, stock markets around the world, especially in Hong Kong, usually follow suit in the end, but it still depends on how the economy in China performs.
Jamesjinlin Prophet26 : That is your ignorance.