What impact does the interest rate cut have on the cryptocurrency market? Why is it so important?
Recently, the cryptocurrency market has been confused by the news that the United States will not cut interest rates this year, and may even raise interest rates to 8%.
What does raising interest rates to 8% mean?
One possibility is that this is just a bluff, because it is doubtful whether such a high interest rate can be sustained.
Another extreme possibility is that even at its own cost, it is necessary to hit other countries' financial systems, especially China, by raising interest rates in order to maintain influence in the US dollar system.
However, the more likely scenario is that the Federal Reserve will still cut interest rates this year, and the key lies in the magnitude and frequency of the rate cuts.
Why has the United States been slow to cut interest rates? It faces a dilemma.
Cutting interest rates may lead to capital flows to Europe and China, weakening the economic effects that the United States seeks for supporting the Russian-Ukrainian war, and may also aggravate domestic inflation and economic pressure, as well as affect trade balance and manufacturing recovery.
Failure to cut interest rates will make it difficult for the United States to bear the high interest rates on US debt, which may accelerate the hollowing out of the manufacturing industry, increase unemployment, and put pressure on the economies of allies, and may even trigger a US debt crisis and shake the petrodollar system.
Therefore, the United States is currently adopting a delaying strategy and waiting for the election results.
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