FED’s next decision in September

Hey everyone,

I’ve been thinking a lot about the recent sell-off in the stock market and the role of the Fed in all this. Here’s my take, and I’d love to hear your thoughts!

So, here’s the situation: Japanese banks have been lending to investors, who then invest globally where returns are better than in Japan. With the yen getting stronger, these investments aren’t as profitable anymore, so everyone’s selling off.

Here’s the Fed’s dilemma: Cutting rates could boost the stock market by making borrowing cheaper, but it would weaken the dollar, worsening the situation with the yen and those global investments.

So, it looks like the Fed can’t really fix the stock market by just adjusting rates, because every move has its own set of complications.

Edit 1: “fix the stock market” was a poor choice of words.

Edit 2: Many people are missing my point. What I am trying to say is that even if the Fed cut rates in September the stock market will still go down because the pressure of a strong Yen.