Has everyone heard the news?

The Fed has finally cut interest rates!

This is the first time since 2020.

On September 18th, Fed Chairman Powell announced that the interest rate would be lowered by 50 basis points to 4.75%-5.00%.

As soon as this news broke, the global financial market was in an uproar.

Do you remember last year when the Fed was aggressively raising interest rates?

Back then, to combat inflation, the Fed raised rates by 550 basis points in a year, setting the fastest pace of rate hikes in 40 years.

But who could have anticipated that this would lead to a slowdown in US economic growth, even facing the risk of recession.

Despite the United States' usual rhetoric, it's clear that this rate cut is not a benevolent "warmth delivery."

To put it bluntly, it's a desperate move.

The US economy is faltering, debt pressure is mounting, and with the world moving towards "de-dollarization," the dollar's dominance is at risk, forcing this rate cut.

However, speaking of which, this Fed rate cut is a godsend for China.

Advertisement

You see, China is one of the largest creditors to the United States.

When the Fed raised rates before, China didn't come out unscathed.

Now, with the Fed cutting rates, it's as if they're giving China a gift.

On the very day the Fed announced the rate cut, China didn't sit idle.

The Ministry of Foreign Affairs ordered sanctions on nine US military-industrial enterprises involved in selling weapons to Taiwan.

This move is a masterstroke!

Isn't the United States always trying to provoke us on the Taiwan issue?

Now, we're hitting their Achilles' heel.

Speaking of which, China still holds an ace up its sleeve—$776.5 billion in US debt.

Some say, should China take this opportunity to sell US debt?

But it's not that simple.

Although US debt carries risks, in this chaotic world economy, it's still a relatively safe choice.

Moreover, China-US relations are one of the most important bilateral relationships in the world, and we can't act recklessly, can we?

This Fed rate cut is, to put it bluntly, a result of the US's own actions.

In the past, to save the economy, they printed money like crazy, causing global prices to rise.

Now, they're reaping what they've sown.

The US government's debt has exceeded $35 trillion, and the economic fundamentals are a mess.

For China, this Fed rate cut is a great opportunity.

It can alleviate pressure from capital outflows and stabilize the yuan exchange rate.

Most importantly, it gives our central bank more room to adjust policies.

Before, due to the large interest rate differential between China and the US, we were hesitant to cut rates for fear of yuan depreciation.

Now, with the Fed cutting rates, we can act more freely.

At the end of the day, this Fed rate cut is not just an economic issue but also a new trend in the Sino-US rivalry.

It reflects the predicament of the US economy and embodies the global trend towards "de-dollarization."

For China, this is undoubtedly an opportunity.

But we must also keep our eyes wide open and not be deceived by appearances.

After all, in this complex international situation, every move must be carefully considered.