It’s not just that the United States doesn’t want to raise interest rates—this is true worldwide. Right now, artificial intelligence can arguably be the core lifeline of the global economy.
When government debt burdens are high and natural population growth turns negative, without more people it becomes impossible to consume the ever-increasing debt; the bubble keeps getting inflated. At this time, the global economy is all strung tightly on a single wire. But none of the world’s developed countries wants to be the one who causes that wire to snap.
Earlier, Trump misjudged the situation in the Middle East. Energy prices surged sharply, creating an inflation shock. Faced with no choice, central banks around the world have been forced to raise interest rates to temporarily curb inflation—but nobody wants the rate-hiking cycle to truly return for the long run.
After synchronized rate hikes, global bond yields rose and risk assets—especially the stock market—came under pressure. If policymakers are still overly hawkish at this point, it’s nothing short of dragging everyone into a collective financial blow-up.
So after Federal Reserve governors weakened the rate hike for October, the European Central Bank, the Bank of England, and the German central bank all made adjustments. Traders have already started to gradually scale back the expected rate hikes in Europe for 2027.
At present, what central banks around the world can do is only to delay rate-hike expectations—so that interest-rate increases do not become a continuous policy. Second, they can only hope that Trump can wrap up the situation with Iran as soon as possible. Whether through military conquest or by seeking negotiations, energy prices cannot stay at high levels for too long. Otherwise, the second-round inflation brought about by energy would force the world to keep raising rates. Then, the United States might be able to weather it temporarily, but some European countries cannot withstand the pressure in their financial and economic systems!#美国10年期美债收益率逼近5.3%
When government debt burdens are high and natural population growth turns negative, without more people it becomes impossible to consume the ever-increasing debt; the bubble keeps getting inflated. At this time, the global economy is all strung tightly on a single wire. But none of the world’s developed countries wants to be the one who causes that wire to snap.
Earlier, Trump misjudged the situation in the Middle East. Energy prices surged sharply, creating an inflation shock. Faced with no choice, central banks around the world have been forced to raise interest rates to temporarily curb inflation—but nobody wants the rate-hiking cycle to truly return for the long run.
After synchronized rate hikes, global bond yields rose and risk assets—especially the stock market—came under pressure. If policymakers are still overly hawkish at this point, it’s nothing short of dragging everyone into a collective financial blow-up.
So after Federal Reserve governors weakened the rate hike for October, the European Central Bank, the Bank of England, and the German central bank all made adjustments. Traders have already started to gradually scale back the expected rate hikes in Europe for 2027.
At present, what central banks around the world can do is only to delay rate-hike expectations—so that interest-rate increases do not become a continuous policy. Second, they can only hope that Trump can wrap up the situation with Iran as soon as possible. Whether through military conquest or by seeking negotiations, energy prices cannot stay at high levels for too long. Otherwise, the second-round inflation brought about by energy would force the world to keep raising rates. Then, the United States might be able to weather it temporarily, but some European countries cannot withstand the pressure in their financial and economic systems!#美国10年期美债收益率逼近5.3%
