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2025-11-27 14:27:34

How should the Fed's interest rate policy be played out?

A chief investment officer from an investment institution recently put forward a key perspective: the Fed's interest rate must exceed the inflation rate. Why is that? Because this is the core means to suppress inflation and keep the economy in check.

In simple terms, when the cost of borrowing money (Intrerest Rate) is lower than the rate of price increases (inflation), the market will continue to go crazy with leverage, and inflation cannot be stopped at all. Only by allowing the interest rate to truly "bite" inflation can funds calm down and the economy return to a normal track.

This logic sounds simple, but executing it is the most troublesome balancing act for the Fed.

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BearMarketSurvivor

· 9h ago

Interest Rate has surpassed the inflation line... easy to say, but how many times have we truly maintained this defense line? It is often just talk; once the market starts screaming, policies begin to compromise.

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SerumSurfer

· 11-27 14:54

If the interest rate cannot suppress inflation, then it is feeding the leverage lunatics with sugar, and it will explode sooner or later.

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AltcoinHunter

· 11-27 14:53

The theory of interest rates suppressing inflation sounds perfect, but how does it actually work in practice? The Fed has long been in a mess, which is why the crypto world has never been stable enough. Another analysis claiming to grasp the essence of economics, but I see... 99% of people don't care about this at all, only concerned whether their bags are rising or falling [laughing and crying] To be honest, I care more about whether this policy is loosening or tightening, because that directly affects liquidity. Only when liquidity is good can there be a hundredfold opportunity, you understand? Wait a minute, when they talk about interest rate policies, I'm already studying the technical aspects of the next potential star. Who still cares about those macroeconomics? It sounds rational, but the market has never been rational. Just look at the crypto market and you'll know—it's always about crazy leverage, and it doesn't matter how many times you tell them.

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HodlKumamon

· 11-27 14:52

Xiong Xiong just calculated the actual Intrerest Rate, and in the era where inflation can't be controlled, the leverage really skyrockets. In this wave, Powell has to toughen up.

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GhostInTheChain

· 11-27 14:48

Again, it's the same "Interest Rate must beat inflation" rhetoric, how many times have we heard this... The question is, does the Fed really dare to hard land? --- It's easy to say, but if they really raise rates to that extent, the economy would collapse directly, and when unemployment skyrockets, who will clean up the mess? --- Leverage has reached its limit, can just adjusting the interest rate really calm things down? I think it's doubtful. --- So we still have to bet that the Fed won't really play that hard. --- Inflation and interest rates, this pair of enemies, destined that no matter what the Fed chooses, they will be criticized. --- To be honest, who still believes that the Fed can control things accurately? It's all just speculation.

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SolidityJester

· 11-27 14:48

In fact, the interest rate needs to outpace inflation; otherwise, the funds will keep causing trouble. --- The Fed's operation is really difficult; if not careful, the economy could go downhill. --- So now it depends on whether Powell can stabilize the situation; the gambler's mentality needs to change. --- That's right, a negative real interest rate is essentially giving the green light to leverage. --- The problem is, once the interest rate hikes too much, what happens if the unemployment rate goes up? That's what the Fed is truly worried about. --- Simply put, they don't want money to be too cheap; otherwise, anyone would dare to borrow money for speculation. --- To put it nicely, it's a balancing act; to put it bluntly, it's gambling, betting on when inflation can truly be curbed.

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ImpermanentPhobia

· 11-27 14:40

Interest rates suppressing inflation? It's easy to say, but when the economy is on the brink of collapse, the Fed is just as panicked. --- It's the same old rhetoric, but is reality really that linear? It feels like all this is just hindsight wisdom. --- The fundamental reason for the rampant leverage isn't low interest rates, come on. --- The problem is that when the Americans raise interest rates, they shout about economic recession, and when they lower interest rates, it's a flood of point shaving, who the hell can manage this balancing act? --- It's right but useless, logic has to give way to political pressure. --- In reality, if interest rates really do suppress inflation, the housing market and stock market would have collapsed long ago, would the Fed dare?

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MEVHunterLucky

· 11-27 14:38

Interest rate needs to surpass inflation? Easy to say, but hard to do, the Fed must be in a tough spot right now. --- Here comes that theory again, but can it really be controlled? It feels like every time it's just talk without action. --- As long as the leverage monster is alive, inflation won't die, the Fed really needs to make a tough decision this time. --- It sounds like playing with fire, if the interest rate is too aggressive the economy will collapse, if it's too loose inflation will explode, there’s no perfect answer. --- Let’s wait and see how the Fed wraps this up, anyway, right now I dare not borrow money or hold coins. --- Isn't this just gambling? Betting on a soft landing for the economy, betting wrong could mean a replay of the Great Depression, it's too thrilling.

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