On September 19, 2024, the biggest news was that the Federal Reserve, for the first time in four years, conducted a rate cut of 50 basis points.

This move by the Fed has been interpreted by many media outlets, especially those in finance, real estate, and those with vested interests, including a host of so-called experts, as "a sign that the Fed's monetary policy is shifting from tightening to easing."

It is well known that since the outbreak of the pandemic in 2020, the United States has excessively issued currency, leading to severe inflation in China.

To control inflation, the Fed raised interest rates 11 times consecutively from March 2022 to July 2023.

During the Fed's rate hikes, what was the experience in China?

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The experience was that businesses found it difficult to operate, foreign capital fled, companies laid off workers and reduced salaries, and the number of flexible employees surged.

Now that the Fed has started to cut rates, many predict that there will be a second and third time, and that the Fed will continue to cut rates, leading the world's currency into a period of easing.

Of course, such predictions and beliefs have no effect; discussing the direction of things that are not in one's hands is like being led by the nose by expectation management.

Interestingly, many Chinese financial and financial (mainly securities firms) have started to stir, and some real estate influencers have already begun to actively advocate that "housing prices will come back," "the real estate market will be hot again," and "those who sell houses will regret it."

Their basis is that every time the United States cuts interest rates, China will follow suit, and the real estate market will warm up.

Is the Fed's rate cut more important than their own country's policy stance and statements?

This spinelessness and absurd economic understanding, still fantasizing about the past, leading a group of followers to speculate in real estate, and then easily making money?

Without exaggeration or criticism, the current Chinese real estate speculators are almost suffocated by the pressure of supply cuts, some even have difficulty eating, and it is ironic to pin their hopes on the Fed's rate cuts for market reversal and housing price rebound.

An undeniable and very important conclusion is that the United States is a financial empire, and the development of financial thinking far exceeds that of other countries.

Don't the elites and top capital groups in the United States know where the funds will go after the Fed's rate cut?

After the rate cut, the dollar is no longer expensive, and even in terms of return on investment, it may be lower than that of its competitors.

The dollar's return on investment will enter a downward cycle, and funds will inevitably seek new non-dollar assets.

Where will these new flows of funds go?

Looking at the world, there is only China that has enough depth and volume to replace the U.S. stock market and real estate market.

Obviously, regardless of the interests or the current political stance of the United States, such a result is definitely not what Wall Street wants to see.

Therefore, even before this rate cut by the Fed, a series of overt and covert actions against China have never stopped.

Here is a summary for everyone: The Chinese national level has given a "cold treatment," directly telling the U.S. media that the pressure of public opinion does not work in China.

Everyone knows that the IMF is just a megaphone, and the real hope for China to save the real estate market is actually the U.S. government.

But the question is, at the critical moment when the Fed is preparing to cut interest rates, why does the United States hope for the recovery of China's real estate market?

On the eve of the dollar rate cut, the IMF came up with this idea, which has a lot of room for imagination.

If a 1 trillion U.S. dollar real estate rescue plan is introduced, it is uncertain whether the building can rise, but one thing that is relatively certain is the depreciation pressure of the yuan.

In this way, the 14 trillion yuan of foreign currency related to China may not have any thoughts about entering Chinese assets.

If the above is still a surface-level pit with face-saving, then since September, the United States has dug a lot of pits on the surface.

Here is a simple list: 1.

On the eve of the rate cut, the United States once again played the tariff card against China.

On September 14, the United States introduced new tariff rules for China: among them, the tariff on electric vehicles was raised to 100%, the tariff on semiconductors was increased by 50%, and the tariff on solar cells was increased by 50%, etc.

It basically covers all the advantageous products of the East, and the direction is clear.

This move is intended to continue to prevent funds from flowing to the East, to disperse China's industrial advantages, and to grasp the timing just a few days before the opening of the dollar rate cut cycle.

2.

Once again, it weakens Hong Kong's position.

On September 10, the U.S. House of Representatives passed the so-called "Hong Kong Economic Trade Office Certification Act," requiring the U.S. Secretary of State to determine whether Hong Kong no longer enjoys a high degree of autonomy within 30 days after the bill takes effect, to decide whether the three Hong Kong economic and trade offices in the United States continue to enjoy privileges and judicial immunity.

If not, the economic and trade office must stop operating within 180 days; if it allows the economic and trade office to retain its existing rights, it can continue to operate for one year and must be reviewed and certified by the U.S. Secretary of State on an annual basis.

3.

In terms of capital flow, it promotes India and suppresses China.

On August 30, the MSCI index weight compiled by Morgan Stanley increased India's weight significantly, and China's weight decreased.

The market expects that this adjustment may bring more than 4.5 billion U.S. dollars of capital inflow to India.

In the financial battlefield, the United States' layout tactics cannot be underestimated.

Such a layout also shows that the United States has fully simulated the international consequences of this rate cut and pays great attention to the future flow of funds across countries, so it makes a move in advance to adjust its flow direction.

Why would you think that as long as the Fed cuts interest rates, the capital and savings that have gathered in the United States due to high interest rates will naturally enter China?

At present, with the pressure of China's interest rates continuing to decline, the interest rate expectations in various parts of the world are also changing.

After the Fed's rare 50 basis point rate cut, many places around the world have started a wave of "rate cuts."

On September 19, the Hong Kong Monetary Authority, the Central Bank of Kuwait, the Central Bank of Bahrain, the Central Bank of the United Arab Emirates, the Central Bank of Qatar, and others collectively announced rate cuts.

Before the Fed, many central banks have chosen to "run ahead" and cut interest rates, among which the Bank of Canada has cut interest rates three times in a row.

Give a reason why these profit-seeking funds, ignoring the obviously higher yield than China's countries and economies, will come to China without hesitation?

From an economic logic, it doesn't make sense, even if the Fed cuts interest rates by 50 basis points at one time, the interest rates of most countries and economies in the world that have capital reservoirs are higher than China's.

On the other hand, there is no need to pretend to be confused, what is the first consideration for global speculative capital and hot money to enter a country and region?

It must be safety and liquidity convenience.

For China, it has never been a consideration in the eyes of overseas capital, especially highly liquid profit-seeking investment capital: China's three financial firewalls make it difficult for funds to enter, and they are also subject to comprehensive supervision.

It is even more difficult to leave, and the risk of hidden channels is uncertain.

Objectively speaking, the biggest benefit of the Fed's rate cut is actually China's foreign trade and Hong Kong.

It will never enter China in the form of life-saving dew, to improve the liquidity of the economic environment.

Objectively speaking, this round of the Fed's rate cut should actually be seen as a new round of the Sino-American currency flow competition, which has just opened a new prelude.

The underlying reason for the dollar rate cut is that the world's capital river has temporarily changed its course.

The scale is estimated to be around 10 trillion U.S. dollars, and the money related to China is at least around 200 billion U.S. dollars.

Therefore, the scale of this battle around the flow of capital and wealth can be said to be sitting at 2 and looking at 10.

If you win 2, the scale that can be reached will rise exponentially to 10.

The United States understands this logic, and China also understands it.

Overall, this is still a short-term battle for money flow, temporarily seen for 6 months to 1 year, which is a short line.

However, do not underestimate it.

Because the short line forms the medium line, the medium line forms the long line, the long line forms the national fortune, and the national fortune forms the era.

This is a key century-long competition that neither China nor the United States can afford to lose.

Based on this underlying logic, this round of the Fed's rate cut is actually a double-edged sword for China, with both challenges and significant opportunities.

There is no pure good news, nor is there absolute bad news.

Next, it depends on how China responds, how to resolve, and how to compete and race with the United States on the battlefield of capital flow.

In the short term, the Fed's rate cut can only bring some expected guidance effects on China's real estate and stock markets in terms of sentiment and public opinion, which is nothing more than verbal effect; a noteworthy economic trend in China is the trend of LPR.

If LPR remains stable, China's strategy is still to be loose externally and tight internally, taking the initiative to defend.

In the medium and long term, it depends on whether China can attract and divert the funds and wealth gathered in the United States during the Fed's rate cut cycle.