Historically speaking, let me summarize the performance of different assets around interest rate cuts. Just a side note, historical performance can serve as a reference probability, but it is by no means a certainty for the future. The impact of interest rate cuts on asset prices is usually not the action itself, but rather the changes in market expectations and economic prospects it represents (e.g., whether a soft landing can be achieved, whether a recession can be avoided, blah blah), which is the real variable. In many cases, I am skeptical about the causality between interest rate cuts and the price changes of certain assets. So, we can only say that, historically, in more than 50% of cases, after the Fed cuts rates and the market forms various complex expectations about the economy, certain things happened sequentially. I think this is a relatively rigorous way to put it.

First, U.S. Treasuries—this is the most certain in my view. Rate cuts lead to lower bond yields, and declining interest rates enhance the attractiveness of existing bonds, driving prices up. This is textbook knowledge and almost the most certain linkage in asset prices, especially considering U.S. Treasuries have no default risk. But (even the most certain seesaw isn’t that simple—there’s always a "but") if the economy performs better than expected and achieves a true "soft landing," bond yields might rebound shortly after the first rate cut, leading to lower bond prices—in fact, we’ve seen TLT drop in recent days. But overall, U.S. Treasuries still have a relatively high win rate during rate-cutting cycles, especially long-term bonds, so I remain long TLT (the U.S. long-term bond ETF), even though I’ve already applied the "sell half" strategy at 100, which aligns with my "go-with-the-flow, no-regrets" style.

Second, the U.S. dollar index. Though counterintuitive, the dollar’s movement isn’t linearly tied to interest rate changes. Rather than being driven by rates, it depends more on global investors’ expectations for the U.S. economic outlook. If expectations are positive, the dollar may stay strong, but if economic data deteriorates after rate cuts, the dollar could weaken. In the long run, persistently low rates would likely drive away funds that once sought risk-free returns, which is bearish for the dollar. I believe the dollar index will likely weaken in the long term, creating opportunities for Chinese stocks—let’s go! ✌️.

Third, the most-watched U.S. stocks. I think this is the least certain relationship. Before rate cuts, U.S. stocks may face 阶段性调整 due to expectations of an economic slowdown, but two to three months later, as the economy stabilizes and financing costs decline, this is fundamentally bullish for U.S. stocks. Historically, U.S. stocks tend to perform well in the middle of rate-cutting cycles. I think there’s no need to overthink whether rates are rising or falling—after all, haven’t they been rising for almost 20 years regardless? It mainly comes down to (1) fundamentals and (2) liquidity. Overall, lower funding costs mean lower opportunity costs, which is bullish for the dollar—what else would you invest in? I remain long U.S. stocks.

Gold just hit a new high. Generally, before rate cuts, gold prices rise due to expectations of currency depreciation and increased safe-haven demand. But after cuts, gold’s trajectory depends more on real interest rates and the dollar’s performance. As mentioned earlier, gold’s record high can also be interpreted as the dollar hitting a record low against gold—the dollar’s purchasing power for gold is at an all-time low. The dollar is becoming increasingly worthless due to overprinting. To put it plainly, it’s as inevitable as humans needing to eat. But if the dollar and real rates rise in the short term (which is entirely possible), gold prices could pull back. Over a 100-year horizon, I’m bullish on gold—even if prices stagnate for long periods—because the U.S. is shamelessly printing too much money.

Fifth, crude oil. Generally, maybe, usually, somewhat uncertain but slightly certain, rate cuts (economic slowdown) could suppress oil demand, leading to lower prices. But if the global economy achieves a "soft landing" and maintains strong demand, oil prices could stay high. So, this is basically saying nothing. I have no idea where oil prices are headed.

To summarize, there’s no clear linear relationship—everything is chaos and probability. But these are my views. Just my two cents, not necessarily correct.

$China Merchants NASDAQ 100 ETF(QDII)(159659.CN)