The interest rate cut is a clear signal sent by the central bank on behalf of the country: in the face of slowing economic growth, the country is worried that the rising unemployment rate will affect social stability and is determined to intervene! This can give people and the world a signal of confidence. It can be seen as a prelude to the government's stimulus to economic development. Because the China administration is different from countries like the United States or Japan, the China administration has too many resources for macro-control, which is what Obama envies China leaders. Therefore, the interest rate cut is bound to be the prelude of China government to stimulate economic development, and there must be many means behind it. For example, a large number of fixed assets investment projects have been approved, the deposit reserve ratio has decreased, and new bank loans have increased (for example, from the current 8 trillion yuan to 1 trillion yuan, etc. ), fiscal policy changed to expansionary fiscal policy.
However, all these comprehensive measures can stimulate economic development, but the risk of inflation is increasing. This is the "double-edged sword" theory in our economics.