With the interest rate cut, the interest rate of bonds issued in the future is lower than that of bonds issued before, so the price of bonds issued before in the market is higher than that issued after. In other words, interest rate cuts lead to higher bond prices. The interest rate cut was originally the most beneficial to the stock market, because the lower operating costs of enterprises are conducive to the improvement of corporate performance. However, if the interest rate cut is due to economic recession or even crisis, then the effect on the stock market will need to be cut many times and it will take a long time to play its role. However, during this period, bonds attracted more attention. Investors will actively buy bonds issued before in order to make profits in the future appreciation, so the bond market is easier to make money than the stock market. In addition, there are many interest rate cuts, and the opportunity is among them. In other words, interest rate cuts are good for the bond market.

; 1. interest rate reduction refers to the financial mode that banks use interest rate adjustment to change cash flow. When banks cut interest rates, for financial institutions, the loan interest rate drops and the cost of financiers decreases; For ordinary individuals, the income from depositing funds in the bank is reduced, so the interest rate cut will lead to the outflow of funds from the bank, and the deposit will become investment or consumption, which will lead to an increase in capital liquidity.

Generally speaking, cutting interest rates will bring more funds to the stock market and help the stock price rise. The interest rate cut will stimulate the development of the real estate industry. Interest rate cuts will promote the expansion and reproduction of corporate loans, encourage consumers to buy bulk commodities with loans, and the economy will gradually heat up. From 20 14,165438+122, the benchmark interest rates for RMB loans and deposits of financial institutions will be lowered.

Third, the stimulating effect of interest rate cuts on American economic growth is reflected in five aspects: first, interest rate cuts reduce investment costs and enhance investment demand, and investment expansion makes up for the lack of growth momentum caused by sluggish consumption; Secondly, the reduction of interest rate has reduced the repayment pressure of mortgage borrowers, restrained the rise of default rate in the housing market, and thus prevented the deterioration of the "subprime mortgage storm"; Third, lowering interest rates will further ease the credit crunch and weaken the financing difficulties of production activities and enterprise expansion; Fourth, interest rate cuts support the depreciation of the US dollar exchange rate and stimulate export growth; Fifth, interest rate cuts have enhanced market expectations and curbed the contraction of economic activities under lack of confidence.

4. Due to the lag of policies, the short-term, medium-term and long-term stimulus (short-term 1 year, medium-term 2-3 years, long-term 4-5 years) are different. In the short term, the expansion effect of loose monetary policy will gradually appear. At the beginning of interest rate cut, the actual effect is limited, and the strength of financial market mainly comes from the confidence recovery brought by interest rate cut. Since the second quarter, GDP growth has slowed down due to weak consumption. In the medium term, cutting interest rates can prevent the US economy from falling into recession. In the long run, the impact of interest rate cuts on the real economy is very limited, and the adjustment of the price mechanism makes the effect of interest rate cuts basically reflected in the increase of liquidity and inflationary pressure. On the whole, the Fed's interest rate cut will contribute to the US economic growth in the short and medium term, and the "subprime mortgage crisis" is less likely to bring about a "Great Depression"-style US economic crisis.