On the date in US time, the Federal Reserve concluded its monetary policy meeting and announced a reduction in the target range for the federal funds rate by 25 basis points to between 1.75% and 2.00%. This marks not only another rate cut following the 25 basis points reduction in July, but also the second rate cut since December 2015, officially signaling the entrance of US monetary policy into an easing cycle.

The US presidential election has just concluded, and the Federal Reserve's second interest rate cut has followed closely, which inevitably leads to various speculations. Is it reasonable or unexpected? Federal Reserve Chairman Powell stated that this rate cut is still aimed at maintaining the balance between unemployment and inflation, pushing interest rates towards a neutral level, in line with market expectations.

At first glance, the recent Federal Reserve rate cut appears to be a planned adjustment. However, upon closer examination of the differences in the statements released by the Fed after its two rate cuts this year, many doubts emerge. The latest statement from the Fed omits the description of "greater confidence in inflation persistently moving towards %," and mentions that the economic outlook is unstable, suggesting some doubts about the economic expectations following Trump's inauguration. Additionally, Federal Reserve Governor Michelle Bowman, who had strongly opposed the first rate cut this year, surprisingly agreed to the decision this time, a sudden shift in stance that is puzzling. Many analyses suggest that the Fed's rate cut this time is not purely economic in nature and likely carries certain political considerations.

Head-on confrontation, direct clash? During the press conference, Powell repeatedly tried to distance this rate cut from Trump's election, and showed a tough stance of not resigning. Powell said, "I will not resign because the president does not have this power; the law is on my side." However, Powell, in an awkward position, seems to be somewhat one-sided: as the Republican Party secured a majority in the Senate in the elections, Trump will historically control the legislative, executive, and judicial branches of the government.

Trump's dissatisfaction with Powell has long been common knowledge. Trump has stated on multiple occasions that he would settle accounts with Powell after winning the election. Notably, his campaign team even came up with a plan for a "shadow chairman" to undermine Powell's actual power and ultimately change the structure of the Federal Reserve. Shortly after Trump's victory, the Federal Reserve announced a rate cut. The timing was tight, and the language was strong. It remains to be seen how long Powell can keep his position amid this direct confrontation...

Resurrection from the dead? Drinking poison to quench thirst! In the short term, after entering the interest rate cut cycle, the vitality of American capital will indeed be released and strengthened. With lower interest rates, more funds flow into the financial markets, increasing employment opportunities, stimulating national consumption, and accelerating the speed of economic circulation in the United States. However, in the long run, the decline of the U.S. economy has become an undeniable fact. In recent months, the U.S. unemployment rate has continuously exceeded %, triggering the "Sahm Rule" that signals an economic recession. With poor employment prospects, American consumer spending has become increasingly cautious.

Especially after Trump took office, his insistence on imposing tariffs on foreign countries and reducing taxes domestically is highly likely to lead to a resurgence of inflation, plunging the U.S. economy into a new round of turmoil. Whether it's aggressive interest rate hikes or unlimited quantitative easing, these measures are essentially treating the symptoms rather than the cause, and "quick-relief pills" cannot reverse the reality of American industrial hollowing and capital virtualization.