The Fed's rate cut kicks off, with the risk of a "hard landing" for the US economy disrupting asset trading logic

On the early morning of September 19th Beijing time, the Federal Reserve announced a 50 basis point cut in the federal funds rate target range to a level between 4.75% and 5.00%. Institutional professionals indicated that this rate cut by the Fed is seen as the start of an "unconventional" move, sparking concerns in the market about a "hard landing" for the US economy. Regarding the future interpretation of the Fed's monetary policy, institutional professionals predict that there will be two more rate cuts within the year, with the overall rate cut cycle potentially lasting over a year. In terms of trading logic for major asset classes, given the time needed to disprove the expectation of a US economic recession and the upcoming US presidential election in the fourth quarter, major asset prices may experience significant volatility in the short term. Subsequently, it may be necessary to observe the actual performance of various data such as the US economy, inflation, and employment. (China Securities Journal)