As an economic powerhouse on the international stage, the United States is all too familiar with the art of shorting the market. For a long time, the Federal Reserve's policies have treated other countries as mere "mugwort" to be harvested for their own profit. However, after the Federal Reserve recently suffered substantial losses, the U.S. plan to profit from lowering interest rates has completely backfired. In an attempt to reassure the public, Federal Reserve Chairman Jerome Powell urgently stated that the situation is still under control.

In reality, while the U.S. economy has been on the decline, China, on the other side of the ocean, has sounded the trumpet of our counterattack after being repeatedly sanctioned.

The context of the Federal Reserve's massive losses is closely related to the loose monetary policy of the past two years. To combat economic recession, the Federal Reserve initiated a large-scale asset purchase program. By 2024, the negative impacts of this program have emerged one after another.

However, with the economic recovery and increasing inflationary pressures, the Federal Reserve began raising interest rates in 2022. The current federal funds rate has risen to a range of 5.25% to 5.50%, causing the low-yield assets purchased earlier to depreciate, thereby plunging the Federal Reserve's financial situation into crisis.

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Specifically, the financial report for 2024 shows that the Federal Reserve's total income was $40 billion, but the interest expenditure was as high as $300 billion. This huge interest difference resulted in a loss of over $200 billion, marking the largest financial loss in American history.

Such losses have sparked widespread concern in the market, with investors speculating whether the Federal Reserve will adopt more aggressive policy adjustments to address the current predicament.

In response to the Federal Reserve's rate cuts, the People's Bank of China has swiftly implemented a series of significant policy measures, including comprehensive reserve requirement ratio cuts and interest rate reductions, as well as a reduction in interest rates on existing mortgages, and an injection of 800 billion yuan into the stock market.These measures are not only aimed at responding to changes in the international economic environment but also hope to play a significant role in the recovery of the domestic economy.

The "central bank mother" takes the lead with comprehensive reserve requirement ratio cuts and interest rate reductions. This strategy aims to lower the funding costs for financial institutions, release liquidity, and thereby stimulate economic growth. By reducing the reserve requirement ratio, banks will have more funds available for lending, promoting corporate financing and personal consumption.

At the same time, interest rate cuts will directly reduce the loan costs for businesses and residents, helping to enhance investment willingness and consumer confidence.

In the context of a global economy that is generally struggling, the measures of reserve requirement ratio cuts and interest rate reductions can inject strong momentum into the economy, helping businesses cope with market challenges, especially small and medium-sized enterprises, which often face greater financing difficulties.

Another key measure is the interest rate reduction for existing mortgages, which directly affects a vast number of homebuyers and can effectively alleviate their repayment pressure, increase household disposable income. With the reduction of mortgage interest rates, consumer demand for housing is expected to rebound, thereby driving the real estate market to sometimes experience a second spring.

In addition to reserve requirement ratio cuts and interest rate reductions, the central bank has also decided to inject a total of 800 billion yuan in special funds in batches to support the stock market. This move aims to boost market confidence, stabilize the capital market, and avoid market fluctuations caused by changes in the external economic environment. The central bank hopes to stimulate market vitality and promote investors' confidence in the stock market.

Unlike the downward trend of the U.S. stock market, Chinese stock investors, after experiencing several years of a cold winter in the stock market, have finally ushered in the dawn of victory. After the U.S. interest rate cut, this can be considered the most direct countermeasure.

In terms of trade, China actively carries out cooperation with other countries, seeking new markets and investment opportunities. In the first seven months of this year, the bilateral trade volume of goods between China and ASEAN increased by 10.5% year-on-year, reaching 3.92 trillion yuan.

During the downturn in the U.S. economic market, China, as a super economic power, has shown a positive influence in the world.

Powell emergency modeFacing China's active countermeasures, as well as the Federal Reserve's current substantial losses and market unease, Powell delivered an urgent speech.

He emphasized that despite facing significant challenges, the Federal Reserve remains committed to achieving price stability and maximizing employment. Powell pointed out that maintaining transparency and the flexibility of strategy are key to dealing with the current economic environment. However, in the face of Powell's urgent speech, many netizens jokingly referred to it as the "Powell Emergency Mode."

Powell's remarks provided a stable expectation for the market, but it is still necessary to pay attention to the balance between future inflation and economic growth. If inflation continues to rise, the Federal Reserve may be forced to further tighten policy, which will put pressure on economic recovery.

However, the current global economy is no longer the Federal Reserve's "cash cow." Since China began to fight back, the United States' tried-and-true short-selling plan has only ended in failure this year.

At the same time, China's economic recovery prospects remain full of potential. By implementing flexible monetary policy and fiscal stimulus measures, China's economy is expected to achieve steady growth in the next few years.