Sharing my thoughts on U.S. interest rates right now, Currently, there are three major forces competing for dollar capital in the market, but their resistance to high interest rates is completely different: The U.S. Treasury (backed by national taxation power) and tech giants (with massive and stable cash flows) are completely insensitive to interest rates. No matter how high borrowing costs get, they’ll continue issuing debt—absolute power players. The weaker players are mainly ordinary households (first-time homebuyers), small businesses, startups, and commercial real estate. Because the government and tech giants are continuously engaging in large-scale spending, they’re propping up the economic fundamentals, making it hard for inflation and overall demand to come down. Meanwhile, the weaker players are slowly bleeding out under high interest rates. This is also the source of disagreement within the Fed during this meeting. Further rate hikes don’t hold much practical significance anymore, because the root causes of inflation will continue borrowing even under high interest rates, while weaker players will be pushed out of the capital market. If the Fed is forced to cut rates this year, it’ll mean the private economy can no longer hold on. Essentially, the policy is making time incredibly expensive, and assets without cash flow support will slowly be squeezed out. Looking at it now, it seems like the weaker players are just being forced to exit earlier.