The Fed's recent moves have been no small feat, with an explosive jobs report coming out and global markets dancing along. Just when everyone was still holding on to the glimmer of hope for an interest rate cut, this report directly extinguished the hope. No, before we have eased up, a harvest storm that may sweep the world will follow. We have to talk about the details of this.
Let's start with the uproar of the employment report. In September 2023, the United States job market made a big reversal, with a six-month high, the unemployment rate also fell to 4.1%, and wages soared. On the surface, the United States economy looks beautiful, but the water here is deep.
While the market was still applauding the report, the Fed's attitude was a different story. Originally, everyone was hoping that the Federal Reserve would cut interest rates so that the market could breathe a sigh of relief, but who knew that as soon as this report came out, the door for the Fed to cut interest rates was completely closed. The market originally had a glimmer of expectation, but now it seems that it is completely out of play.
And that's not even counting the fact that as soon as the Fed's policy pivot, the dollar index began to dive, and global currency markets followed suit. It's like the Fed dropping a depth charge in the sea of the global economy, stirring up panic. You say, this dollar is still the old dollar, holding the banner of "world currency" and stirring up trouble around the world.
As a result, not only the United States, but many countries around the world have felt this shock wave. This is especially true for countries that are heavily indebted or dependent on exports. No, 17 countries have already felt the pain of exchange rate depreciation, and their economic prospects are confused.
In this context, Dalio of "Bridgewater" came out to comment, saying that the United States is following the old path of Japan, and the abyss of the debt crisis is not far away. These words are not to scare people, debt, inflation, asset bubbles, these three mountains are pressing on the head of United States, and the Fed's current situation is really not easier than walking a tightrope.
At this time, you may ask, what is the mystery of this employment report? It turned out that although this report looked at the good performance of the United States economy, internal problems were the focus of many experts and analysts. They fear that this growth is only superficial, a kind of "false prosperity" that hides more economic instability.
And this instability is not just an internal matter in the United States. Because of the global influence of the dollar, any economic fluctuation in the United States can cause effects on a global scale. This employment report is not just a matter of United States, its influence spans the ocean and affects the stability of the global economy.
As it happens, global markets are nervously waiting to see what the Fed will do next. The maintenance of high interest rates may puncture asset bubbles and cause turmoil in financial markets; And if interest rates are cut, it could fuel inflation again and plunge the economy into a new round of trouble. This dilemma has left many market participants feeling big.
So, this is not just a United States jobs report, but a game about the future of the global economy. Every country is closely watching every movement in this game, because any adjustment of strategy may directly affect their economic security.
Against this backdrop, the future of the global economy is fraught with uncertainties. Every country, every market participant, is trying to read every little move of the Fed, hoping to find their own way to survive from it. However, it is undeniable that as this "harvest storm" approaches, risks in the global economy are accumulating, and the road ahead is full of challenges.