The rate-hike meeting is approaching—will the interest rate increase actually happen as the market expects?
In fact, many people don’t believe the U.S. will raise rates. Jobs are still doing fine, inflation is still manageable, and corporate loan defaults are also acceptable. The U.S. is basically just manufacturing panic.
But you’re overlooking one key issue: the Fed’s determination to curb inflation means it must suppress yields—otherwise U.S. Treasuries won’t be bought.
Moreover, over the past decades, every year has seen huge amounts of money poured into building factories and purchasing equipment. This has seriously hindered the flow of capital.
In plain terms, tech giants drained all the funds to build—this massive, unrestrained capex has sucked all available liquidity out of the market to buy “bricks and hardware.” And these things, in the short term, can only be locked up.
Once the money is fully pre-committed, tech companies still need more funds to continue building. They can only push corporate bond yields up to 10%, and soon they may jump to 15% or even 20% to attract more money.
What can governments and new businesses do when they need capital? They can only have banks keep offering higher interest rates to absorb the money they require. If banks don’t raise rates, they can only watch the money run away—so they have no choice but to hike rates just to keep themselves at the gambling table. So the rate hike is also a reluctant move; at its core, it’s just cleaning up after this AI bubble.
Do you think they’ll raise rates or cut them?$BTC #ZcashRises6%
In fact, many people don’t believe the U.S. will raise rates. Jobs are still doing fine, inflation is still manageable, and corporate loan defaults are also acceptable. The U.S. is basically just manufacturing panic.
But you’re overlooking one key issue: the Fed’s determination to curb inflation means it must suppress yields—otherwise U.S. Treasuries won’t be bought.
Moreover, over the past decades, every year has seen huge amounts of money poured into building factories and purchasing equipment. This has seriously hindered the flow of capital.
In plain terms, tech giants drained all the funds to build—this massive, unrestrained capex has sucked all available liquidity out of the market to buy “bricks and hardware.” And these things, in the short term, can only be locked up.
Once the money is fully pre-committed, tech companies still need more funds to continue building. They can only push corporate bond yields up to 10%, and soon they may jump to 15% or even 20% to attract more money.
What can governments and new businesses do when they need capital? They can only have banks keep offering higher interest rates to absorb the money they require. If banks don’t raise rates, they can only watch the money run away—so they have no choice but to hike rates just to keep themselves at the gambling table. So the rate hike is also a reluctant move; at its core, it’s just cleaning up after this AI bubble.
Do you think they’ll raise rates or cut them?$BTC #ZcashRises6%
加息
59%
不加不降
33%
降息
8%
125 votes • Voting closed
