Here is the English translation of the provided text: Regardless of whether the Federal Reserve lowers interest rates by 25 basis points or 50 basis points tonight, in the coming years, the Fed is set to embark on a new round of monetary easing.

According to the predictions of traders, by the end of 2025, the Fed will have cumulatively cut interest rates by around 250 basis points, which is quite a wild operation!

The Fed's rate cut is a done deal, so what kind of impact will the global economy face next?

It seems that every time there is an economic issue, our first reaction is: "The imperialists' desire to see us fail is never-ending; most of the reasons for the economic downturn are ultimately attributed to the Federal Reserve.

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As long as the Fed cuts interest rates, our economy can quickly rebound!"

Logically, there is no problem with this, but the actual situation often differs from expectations.

You might think that the rate cut is like the Fed administering a strong stimulant, but the actual result could potentially lead to a "fatal overdose."

Lowering interest rates is like a quick fix for the economy, but it doesn't always hit the mark.

According to the Fed's logic, lowering interest rates means reducing borrowing costs.

By making it cheaper for businesses to borrow from banks, increasing consumption and investment can lift the stock and real estate markets, which in turn can boost the entire economy.

However, historically, the Fed's rate cuts have not always stimulated economic growth; sometimes they have even exacerbated economic bubbles, almost causing a collapse.

In the 1970s, due to the Vietnam War, the oil crisis, and the decoupling of the dollar from gold, the U.S. faced severe stagflation, with both inflation and unemployment rates skyrocketing, triggering an economic crisis across the Western world.

Under these circumstances, the Fed urgently initiated a rate-cutting mode, attempting to stimulate economic growth by lowering interest rates, but the outcome was counterproductive.

In 1975, U.S. inflation soared to 12%, and the unemployment rate also broke through 9%.

After a series of operations, not only did the U.S. economy fail to rebound, but inflation hit the ceiling.

In 2001, during the burst of the internet bubble, the Fed, in an attempt to save the stock market, dramatically reduced interest rates from 6.5% to 2%.

The result was that the stock market was not saved, and the economy was further derailed.

The U.S. GDP growth rate that year was only 0.8%, and the unemployment rate soared to 5.7%.

This rate cut was akin to patching Windows; it seemed like a lot of effort, but in reality, it was useless.

The system would still crash when it was supposed to.

This rate cut not only failed to prevent the economic slowdown but also led the entire market to become dependent on low interest rates, indirectly contributing to the 2008 subprime crisis.

In 2008, with the collapse of Lehman Brothers, the financial storm swept the globe, and the Fed this time chose an even more aggressive rate-cutting strategy, with bank interest rates approaching zero, followed by quantitative easing, with an excess issuance of more than 700 billion U.S. dollars.

However, despite the interest rates dropping to historical lows, the U.S. financial market still chose to crash.

Data shows that the U.S. GDP growth rate in 2008 was negative 0.1%, and the unemployment rate soared to 10%.

Banks went bankrupt as they should have, and the real estate market had to crash even if it didn't want to.

This crisis only proved one thing: the Fed's aggressive rate cuts were just a local anesthetic for the market.

Once the financial market is out of control, it is very difficult to save, and rate cuts only postpone the problem, but do not solve it.

The data tells us that Fed rate cuts do not necessarily prevent recessions.

The economic recessions of 2000, 2007, and 2020 all occurred during the rate-cutting cycles.

In the short term, rate cuts can stimulate consumption and investment, and can also alleviate corporate pressure by reducing financing costs.

However, this simple and crude method can increase market liquidity, but it cannot improve the work efficiency of Americans, nor can it bring manufacturing back on a large scale.

In the long run, rate cuts can also push up asset prices, especially in real estate and the stock market.

The internet bubble of 2000 and the subprime crisis of 2008 both occurred in an environment of rate cuts.

Today, the U.S. stock market has been inflated to the sky, with the price-to-earnings ratios of technology companies generally exceeding 30 times, which is nearly double the historical average.

The U.S. stock market bubble has reached a historical peak.

If the Fed's rate cuts give it another push, the bubble will continue to expand.

Once it collapses, it will not only hurt the United States but also trigger a super nuclear bomb that detonates the global financial market.

In addition, rate cuts that are too late or too large can also scare away all investors.

In 2001, it was because the Fed was slow to cut interest rates.

When it finally couldn't stand it anymore, the hot money had already gone to emerging markets, and the Fed's market rescue was in vain.

In 2023, the U.S. dollar index has already shown signs of weakness.

In August of this year, the dollar has been struggling to hold above the 100-point mark.

Rate cuts will only further weaken the attractiveness of the dollar.

If capital outflows accelerate, the U.S. economy will still face the problem of recession.

Some friends may ask, since the risks of rate cuts are so high, why does the Fed still face the pressure to open the rate-cutting cycle?

First, although rate cuts will bring risks of bubbles and capital flight, it is a matter of choosing the lesser of two evils.

In 2023, the debt scale of U.S. companies has approached 10 trillion U.S. dollars, and the federal government has exceeded 35 trillion U.S. dollars.

If interest rates are not lowered, small and medium-sized enterprises in the United States cannot bear the burden, and the inflated stock market for several years may crash in advance.

The Fed chose to cut interest rates at this time, first, because the U.S. job market is still strong, with the unemployment rate always stable around 3.5%, but consumer confidence has fallen a lot, and GDP growth is only 2.7%: second, the global supply chain is also gradually recovering, especially the Sino-American trade war will probably enter an intermission, and China's export products can reduce the level of social inflation, providing support for the U.S. economy.

From our perspective, once the Fed lowers deposit interest rates, funds will flow to Europe, the Middle East, and other resource-rich countries.

They will use their money to buy Chinese industrial products.

Export companies with new orders will drive domestic industrial production, and everyone with money in their pockets will dare to consume in advance and take over the real estate market.

As long as real estate prices are stable, the country has time and space to complete industrial upgrading and economic transformation.

However, it should be noted that the Fed's rate cuts are the pros and cons of a coin, especially for China and Japan, two countries that rely on exports for food, the impact is more complex.

For Japan, rate cuts may push up the yen exchange rate, weakening its export competitiveness, especially in the context of a weak global economy.

A strong yen will only become a burden on the Japanese economy.

Data shows that Japan has been recording a trade deficit since 2022, with a total deficit of more than 100 billion U.S. dollars in the first half of 2023.

The Fed's rate cuts will further intensify this situation.

In order to protect exports, the central bank will continue to cut interest rates to devalue the yuan along with the dollar.

Last year, the yuan depreciated by nearly 8% against the U.S. dollar, and the yield on 30-year government bonds has fallen below 2.2%, which means that the ability of companies to make money is declining, and the returns on risk-free investments are getting lower and lower.

The Fed's rate cuts may lead to further capital flows to other high-yield markets, which means that the hot money that has been waiting for several years may bypass India or Southeast Asia.

The debt problem can be alleviated, but investment and consumption may not necessarily rise.

Of course, if a large amount of hot money comes in, it is not a good thing either, because it will lead to asset bubbles and social inflation.

Once the funds start to withdraw, it will be another bubble collapse.

In general, the U.S. rate cut can temporarily relieve pain, but it may also lead to greater risks.

Whether the rate cut is a panacea or a time bomb is still hard to answer.

However, for us, the U.S. rate cut may allow our companies to catch their breath, but to solve the problem completely, we still need to rely on technological innovation and industrial transformation.