Fed Declares War, Drops Bombshell, May Halt Rate Cuts, $36T in Retreat

Is the US financial market really on the verge of collapse?

Recently, tuning into financial news has become a heart-racing experience—monetary policies of the Federal Reserve, inflation data, and debt issues take turns dominating the headlines, leaving many investors feeling overwhelmed and disoriented. Particularly in September, the US financial market faced a stormy period, causing global investors to become extremely anxious. Inflation is at an absurdly high level, and the unemployment rate has suddenly increased, even prompting Federal Reserve officials to engage in a "mind-reading game" at important meetings. Is this a prelude to a "hard landing" of the economy, or is there more to the story?

With such high inflation, will our wallets need to "slim down"?

Let's start with the issue of inflation. The core Consumer Price Index (CPI) rose by 4.3% year-on-year in September, a figure higher than market expectations. In plain terms, this means that the cost of living for Americans has increased again! No one wants to see every product tag in the supermarket being adjusted upwards, but that's the harsh reality. People originally thought that inflation was about to "cool down," but it made a "comeback" this time, directly slapping the market in the face. For the Federal Reserve, this situation is like playing a "harder version" of mahjong—raise interest rates, and the economy might slump; don't raise them, and inflation can't be contained. It's a real dilemma.

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Is the "anomaly" in the job market a blessing or a curse?

Not only is the inflation data causing headaches, but the employment data for September also suddenly sprouted a "black swan." The unemployment rate rebounded to 215,000 people, setting a new high for this year. The US job market, which has always been a stabilizing force for the economy, is now becoming unpredictable. It's important to note that a decrease in job opportunities means a decline in people's spending power, and economic growth naturally loses momentum. The Federal Reserve is also "between a rock and a hard place" on this issue—raising interest rates might lead to a further increase in the unemployment rate, but not raising them won't keep inflation in check, creating a vicious cycle.

Is the Federal Reserve a "divine assist" or a "pig teammate"?Speaking of this, one cannot help but mention the "divine operation" of the Federal Reserve. Recently, Governor Bostic publicly stated that he supports pausing interest rate hikes in November. Does that sound like good news? Don't celebrate too soon! There's a hidden message behind this statement. Pausing interest rate hikes might provide some room for economic development, but it also implies that the possibility of future rate cuts could be indefinitely postponed. In other words, the "market rescue" measures that the market is looking forward to may not come as quickly as expected. Upon hearing this news, investors immediately switched to "panic mode," with the stock market turning red, U.S. Treasury yields soaring, and even oil prices falling, as if the "dominoes" of the global economy were about to collapse overnight.

Is the debt problem really a "bottomless pit"?

Of course, aside from market fluctuations, the most worrisome issue is still the United States' debt problem. The $35.7 trillion in outstanding public debt is a staggering figure that makes one's hair stand on end. What's even more frightening is that this debt is growing at a rate of tens of millions of dollars per hour. The U.S. fiscal situation is like a leaking ship, with one side patched while the other leaks. Some argue that a fiscal crisis is inevitable if this continues. It's important to remember that the U.S. debt issue is not just a domestic matter; it is closely related to the global financial market. If this "time bomb" were to explode one day, it would not just be a U.S. issue; the global market would also be left "black and blue."

How to view the future of the U.S. economy?

Now, the most pressing question on everyone's mind is whether the U.S. economy will really experience a "hard landing." High inflation, a weak job market, the Federal Reserve's "dilemma," and the intractable debt problem all contribute to a future economic trend that is indeed full of uncertainty. Some have even begun to discuss the possibility of the U.S. falling into an economic recession. If it comes to that, the global economy would also be affected. After all, when the U.S. sneezes, the world may catch a cold.

Will the global economic landscape change as a result?

Every "whiff of wind" from the Federal Reserve can trigger a chain reaction in other countries' central banks. After all, the global economy is a large system where "you have me, and I have you." If the U.S. really begins to adjust its policies, other countries will inevitably follow suit and adjust their monetary policies. This global "chain effect" will force central banks around the world to rethink their roles in the international economy.Certainly! However, you haven't provided the text you'd like me to translate into English. Could you please provide the text in Chinese or any other language you'd like translated? Once you do, I'll be happy to assist with the translation.

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