Recently, the global financial markets have been experiencing a severe upheaval. As of September 12, the international gold price soared to a historic high of $3642.64 per ounce, and global stock markets are also showing a positive trend. Behind these market movements is the widespread expectation among investors that the Fed is about to initiate an interest rate cut cycle.

Market analysts generally believe that the Fed may start the interest rate cut process in September and consecutively cut rates 3 times within the year, each by 25 basis points. This optimistic expectation has driven the rise in asset prices.

The core mechanism of the Fed's interest rate cut is to lower the interbank lending costs, guiding commercial banks to reduce loan interest rates for enterprises and individuals. This measure aims to stimulate economic growth, and its regulatory logic is similar to the monetary policy tools of central banks in other countries.

For China, the Fed's interest rate cut may have multiple impacts. Firstly, the cost of imported goods may decrease, which is good news for overseas shoppers. Secondly, the monetary policy space of the domestic central bank may expand, which could affect mortgage rates, and homebuyers should closely monitor relevant trends.

In the United States, the impact of interest rate cuts is more direct. The pressure of monthly payments on residents' auto loans and mortgages is expected to ease, which may stimulate consumer willingness to spend. On the corporate side, the decrease in financing costs may encourage expansion activities, thereby boosting the recovery of the job market.

It is worth noting that the current interest rate cut cycle that began in September 2024 (with a total reduction of 100 basis points) is still in its early stages. The subsequent policy pace and its actual impact on the economy need to be continuously observed and assessed.

However, we should also be aware that there is inherent uncertainty in financial markets. While interest rate cuts are often seen as a positive signal, their long-term effects are complex and variable. Ordinary investors need to fully consider their own risk tolerance when making investment decisions and should not follow the trend blindly.

In addition, interest rate cuts may have subtle effects on the daily consumption habits of ordinary people. For example, the decrease in savings yields may encourage some to increase consumption or seek other investment avenues. At the same time, the reduction in credit costs may stimulate large-scale consumption, such as an increase in demand for housing or automobiles.

Overall, the Fed's interest rate cuts will trigger a wave of financial turmoil globally. Both professional investors and the general public should closely monitor this trend and make informed financial decisions based on their own circumstances.