Oh dear, isn't the Federal Reserve playing a desperate game of hitting doves? Their recent moves remind one of those peddlers in shopping malls who try to retain customers with various discounts and promotions. Even Fed Chairman Powell has made bold statements that the CPI (Consumer Price Index) could be suppressed to 2% next year. Does it sound a bit like the melon seller in the market promising that his melons are sweeter than first love? And here, "interest rate cuts" have become their trump card. Let's discuss the story behind the Federal Reserve's "interest rate cut drama."

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The Fed's Little Calculations

Let's talk about the Fed's interest rate cuts. Don't be fooled by their low profile now; there's a lot going on behind the scenes. Major investment banks like Citigroup predict that the Fed will start cutting rates from September, and it's not just one or two cuts, but a whopping eight times! The total magnitude is as high as 200 basis points. Just think about it, the intensity of these rate cuts is like a supermarket clearance sale, going all the way down.

The Economy Knows Its Own Temperature

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The U.S. economy is also on edge. The GDP growth rate in the first quarter didn't meet expectations, and the situation in the second quarter is even more alarming. Major investment banks believe that economic growth is going to slow down significantly. As for U.S. commercial real estate, it's like a minefield within a minefield, with a major disaster potentially looming around the corner. Do you remember Lehman Brothers in 2008? The current situation in U.S. commercial real estate could easily lead to similar bankruptcy scenarios.

The Chill in the Job Market

The job market is also not performing well. The unemployment rate has soared to 4.1%, setting a new high for two and a half years. Historical data tells us that whenever the unemployment rate rises so rapidly, the U.S. economy is usually hinting to us: "Buddy, get ready for a recession!" So, the Fed sees this and is anxious, making interest rate cuts an inevitable choice.The Bubble Game of the Stock Market

Let's take a look at the stock market. The bubble in the U.S. stock market is now terrifyingly large, with technology stocks being particularly frenzied. Some technology stocks are setting new historical highs every day. Consider this: an artificial intelligence technology that is still in the conceptual stage, with revenues this year possibly not exceeding 10 billion U.S. dollars, yet the market value of the related U.S. companies has skyrocketed by 50 trillion U.S. dollars! The bubble is being blown to such an extent that it can be compared with the dot-com bubble of 2000 and the real estate bubble of 2008.

The Sword of Damocles Hanging Over the Market

Ultimately, once this stock market bubble bursts, the consequences will be no less severe than the previous two economic crises. The U.S. market is now like the Sword of Damocles hanging overhead, ready to strike the economy at any moment.