I believe investors who experienced the ups and downs of the US stock market last night were shaken all over their bodies. Nasdaq fell close to 5% in the intraday period, then turned the tide, and finally closed down 0.63% to 13855.10 points, recording the strongest intraday rebound in history. The last time the index fell 4% and then closed up during the 2008 financial crisis. The Nasdaq trend made everyone appreciate what despair is, and what is also called hope.
Interest rate hikes have not yet begun. Recently, the European and American economies have all experienced a very obvious slowdown, and consumption data are also very sluggish. On the one hand, they are plagued by high inflation, and the pressure on corporate costs is constantly increasing. On the other hand, high product prices have also led to a decline in consumer purchasing power, thereby suppressing consumer demand. Lower demand in turn suppresses enterprise production. Now the US has in fact fallen into the dilemma of economic slowdown.
This is where a very weird scene unfolds:
The Fed has accelerated interest rate hikes and downsizing because the economy is generally strong, demand continues to improve, and employment continues to improve, yet inflation is high;
However, if the Fed acts aggressively, it will cause demand in the US to continue to decline. As we all know, 70% of the wealth of the US residential sector is financial assets. The recent sharp fluctuations in US stocks have recorded the worst performance in 50 years. If assets shrink rapidly, won't it suppress residents' consumption?
Under such circumstances, if the Federal Reserve aggressively raises interest rates or reduces the table, it will cause the US economy...