As the competition in the US election intensifies, many things have gradually exceeded Trump's expectations. Just recently, Trump found that there was one less opportunity for him to perform. A month ago, Trump shouted to the Federal Reserve, hoping to cut interest rates after the new presidential election. The implication is that he hopes to cut interest rates after he is elected as the US president, so that the achievements of stimulating the economy will belong to him. Who would have thought that when he woke up, the Federal Reserve suddenly sang a big drama of cutting interest rates, directly cutting 50 basis points to 4.75%-5.00%, which exceeded the market's general expectation of a 25 basis point cut. You know, after the interest rate meeting in July, Federal Reserve Chairman Powell said categorically that a 50 basis point interest rate cut was not within the scope of consideration. But after this interest rate cut, he stated that this was to save the US labor market. Then, when the interest rate cut storm came, Trump was not polite and directly "bombarded" the Federal Reserve, thinking that it was too much and incredible. He believes that there are only two possibilities for the Fed to cut so much at this stage: either the US economy has become a mess, and those economic data are just nonsense used to scare people; or the Fed is making political moves, trying to use the interest rate cut to stabilize the stock market, canvass votes for the Democratic Party, and help them run for re-election. It is worth mentioning that the last time the United States cut interest rates by 50 basis points was in March 2020, after which the epidemic began to spread. Previously, after the Fed cut interest rates by 50 basis points for the first time in 2007, 2002 and 2001, events such as the "global financial crisis", "the bursting of the Internet bubble" and the slowdown in economic recovery occurred respectively. Combined with the above description, it is no wonder that Trump would break his defense by cutting 50 basis points at once. After all, his own achievements may be robbed, and Trump will naturally respond from the perspective of interests. However, it is still unknown whether Harris can lock in the presidency in advance.

The transmission speed of interest rate cuts on economic growth cannot be faster than the impact on inflation. In some ways, inflation can even stimulate investment. A 50-point rate cut is a radical one, and there is a high risk of inflation rebounding in a short period of time. It is very likely that the lower-class people will first encounter high inflation before they have felt the benefits of economic stimulus, and at this time they will not have a good impression of the ruling party.

In addition, the timing of the rate cut is also difficult to predict. There is still more than a month before the election, and rents may rise soon. By then, there is no telling whether strikes will strike again. In fact, inflation in the United States is not really under control at all, and the transmission speed of aggressive rate hikes to inflation is likely to be faster than expected. In this way, it seems that it is not certain that Harris will lock in the presidency in advance.

So, what impact will the Fed's interest rate cut have on the world? To put it bluntly, once the Fed cuts interest rates, the US dollar will flow to the world to buy places with high investment returns, local asset prices will rise collectively, and the US dollars released by the United States will reap a large amount of value-added returns. If this situation continues, it will be fine, but the problem is that the United States is not a philanthropist and has always treated non-US countries as leeks. As for the impact of the US interest rate cut, it will not be seen in the short term, so let the bullet fly for a while...