Growth - Interest rates [negative growth interest rates]

(It's a novel made from a brain official with a simple factor called interest rate. Please read it for fun.)

Growth - Interest rates [negative growth interest rates]

1. Growth > Interest rates
While growth beats interest rates, the economy is improving even if interest rates are high at 5.5%.

2. Growth < Interest Rate
If it becomes a growth negative or zero, the economy will stagnate even if interest rates are 0%. Interest rates should be added to 0% and liquidity supply.

In the case of the U.S. market, the economy was good even with high interest rates because growth was high. There are many concerns about interest rates falling as the economic downturn comes.

The upcoming interest rate cut is different from the situation where interest rates were zero in a situation where growth was negative like in the case of Corona. If growth becomes negative, the economy stagnates even if interest rates go to zero. Additional liquidity had to be sprayed. Stock prices also plunged.

The rate cut to come is a situation in which interest rates are cut in line with slowing growth. In other words, growth is still taking place. It is a situation where we can preserve growth that has been reduced by lowering interest rates. The base rate of 5.5% means that the Fed has 22 cards to use. (5.5 / 0.25) There have never been so many cards on the card deck.

Goldilocks stabilizes at 3% inflation and stabilizes interest rates at around 4%. It is said to be the situation during the Clinton administration in the mid-1990s. Based on this, a new AI economy will come like in 1995~00 through AI. The U.S. stock market will also form a bubble.

In the mid-1990s, interest rates remained in the 5% range. If growth continues, high interest rates may be maintained. The mid-1990s was a 4% to 5% benchmark interest rate throughout, but stock prices soared.

If the situation is the same as it was in 1995, and a bubble market like 00 is waiting in front of it, the stock price is very cheap even now. There will also be a huge crash like in just 2000. It will take more than 20 years for the AI new economy to come, because of the time difference that the stock price is saved much faster.