FED VS TRUMP RATE CUT WAR HOUSING MARKET CHAOS

● Powell Fired – Trump

Global Economy: Analysis of Trump’s Policies and the Chain Reaction of Interest Rate Cuts

Trump’s Global Economic Strategy

Trump’s ongoing economic strategy is not simply a matter decided by the central bank (Powell).
From Trump’s perspective, it is a way of directly intervening in the economic battlefield.
In other words, he adjusts fiscal policies and the intensity of trade wars in a way that can immediately affect the U.S. economy.
This strategy introduces uncertainty into the global economy while simultaneously demonstrating a willingness to recover the U.S. economy.
Trump’s policy is based on active market intervention through fiscal and trade policies.
This content reflects key keywords such as the global economy, fiscal policy, the U.S. economy, Trump, and interest rate cuts.

International Interest Rate Cuts and Fiscal Support Policies

At the same time, several countries, including Italy, have already implemented interest rate cuts and large-scale fiscal support.
In particular, the fact that interest rates were cut seven times in a row in 2022 is noteworthy.
Central banks around the world are implementing expansionary monetary policies to boost the economy.
Like this, each country’s monetary and fiscal policies are used as a means to respond to Trump’s hard-line trade policies.
This part clearly shows the interrelationship between the global economy and interest rate cuts.

Market and Central Bank Responses

The market cannot hide its anxiety in the face of Trump’s tariff threats and aggressive remarks.
Central banks bear the burden of maintaining systematic monetary policies despite political pressure.
This is why Powell cannot directly reflect Trump’s demands.
Responses such as interest rate cuts and monetary easing policies in major countries like Germany are affecting the global economy as a whole.
This trend is increasing uncertainty not only in the U.S. economy but also in the global economy.

Economic Impact and Prospects of Trump’s Policies

Trump’s words and actions have the potential to shake the global economic order beyond simple policy making.
Reactions to this are occurring not only in the U.S. but also overseas.
Market participants hope that Trump’s decisions will proceed smoothly without a short-term recession, but uncertainty is high due to various variables.
The future global economic outlook will largely depend on fiscal policy, monetary policy, and the policy direction of the United States.
Key keywords such as the U.S. economy, global economy, Trump, fiscal policy, and interest rate cuts are once again drawing attention.

Global economic outlook analysis.
Trump’s economic strategy is being carried out by the president’s intention, not the decision of the central bank.
Several countries, including Italy, have already implemented interest rate cuts and fiscal support policies.
The market and central banks are responding to political pressure and attempting to coordinate policies amidst uncertainty.
Focusing on analyzing the impact of Trump’s policies on the economies of the United States and the world.

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● Rate-Cut Trap

Latest Real Estate, Loan, Interest Rate, and Market Trend Analysis

1. Loan Growth Has Already Reached Its Limit

The capacity for loan growth has reached its limit.
From 2019 to 2024, the total amount of real estate loans in Korea increased by approximately 800 trillion won or more.
The key is the rapid growth rate rather than the absolute amount of loans.
Even if interest rates are lowered, the potential for additional loans may be insufficient due to the previously surged loan volume.

2. Between Leverage and Consumption Contraction

Increased interest expenses due to high loan burdens.
As the loan burden increases, consumption capacity is decreasing.
In particular, self-employed individuals are feeling this burden significantly.
This may lead to a slowdown in domestic demand, hindering economic recovery.

3. Liquidity Trap and Limitations of Interest Rate Policy

There are concerns that even if interest rates are lowered, additional liquidity will not circulate in the market.
Due to the existing increase in loans, money no longer circulates well in the financial market.
In other words, it is questionable whether the market will recover naturally even if the government promotes interest rate cuts or monetary easing.
If trapped in a liquidity trap, the effectiveness of interest rate policies may become insignificant.

4. Real Estate Policy Intervention and Market Distortion

The lifting or redesignation of land transaction permit zones (토재) significantly affects market trends.
Policy intervention leads to temporary demand overheating and transaction distortion phenomena.
The natural market mechanisms of price, demand, and supply are being disrupted.
Unpredictable policy changes hinder the normal movement of the market.

5. Presidential Election and Uncertainty in Real Estate Policy

Real estate policies of leading candidates are drawing attention in relation to the upcoming presidential election.
Excessive intervention in a situation where policy direction is not clear may rather cause market confusion.
It may be wiser to maintain the current state and leave it to market trends rather than drastic policy changes before and after the presidential election.
In particular, changes in contract renewal rights and rent control, etc., provide short-term instability to the market.

6. Market Normalization and Investment Opportunities

Combining factors such as the limit on loan growth, the liquidity trap, and policy intervention,
the current distorted market is likely to return to a normalization phase soon.
In particular, opportunities to purchase a home may arise in a phase where supply increases and demand decreases.
It is expected that some areas such as Gangnam will no longer rely on artificial price increases and will restore their inherent market flow.

< Summary >
This article analyzes the impact of the limit on loan growth in the Korean real estate market, the liquidity trap of interest rate cuts, and government policy intervention on the market in chronological order.
Consumption is contracting due to the surge in loan volume and high interest burden since 2019, and the effect of liquidity expansion is expected to be insignificant despite interest rate cuts.
In addition, policy interventions such as the lifting and redesignation of land transaction permit zones have caused temporary demand overheating and market distortion, and uncertain real estate policies continue before the presidential election.
In this situation, it is expected that when the natural market flow is restored and enters the normalization phase, a good opportunity to purchase a home may come.

Economy, Real Estate, Loans, Interest Rates, Market

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