2026 financial upheaval: Is a 100 basis point rate cut really coming? The yuan approaches 6, where should your money be placed?
Which wind vane for 2026 do you favor? Let's chat... The storm has already arrived.
It's not a prediction, it's happening.
Elon Musk concept small 'milk' 🐶, 'p●u●p●p●i●e●s'
The Federal Reserve is in turmoil, the yuan is skyrocketing, and the AI bubble is about to burst—these three things are simultaneously rewriting your wealth script.
1. Internal division within the Federal Reserve: Is it really worth betting so big on a 100 basis point rate cut in 2026?
On December 11, the Federal Reserve cut rates to 3.5%-3.75%, which seems ordinary, but behind the scenes, it exploded—three dissenting votes, one advocating for a 50 basis point cut, and one opposing a rate cut. 19 officials, completely divided:
3 people want to raise rates, 4 people want to keep them unchanged, 4 people want to cut once, and 8 people want to cut more than once.
The real bomb thrower is Fed Governor Waller. He directly stated during the interview: 100 basis points will be cut in 2026, with rates reaching 2.5%-2.75%. The reason is simple: employment cannot hold.
Powell has already admitted: official employment data may have overstated by 60,000 people; the real new jobs may already be negative.
The unemployment rate has risen to 4.4%, reaching a new high since 2021. More frightening is that:
The unemployment rate for graduates aged 20-24 surged to 8.5%, accounting for over 40% of the US labor force—this group is reluctant to spend money, causing the consumption chain to break immediately.
Wall Street is also confused, predictions are all mixed up:
· Goldman Sachs: two rate cuts, down to 3%-3.25%
· Morgan Stanley: seven rate cuts, down to 2.5%-2.75%
· Rabobank: Political pressure may lead to 3-4 rate cuts
In May 2026, Powell will leave. The dove Hassett, strongly backed by Trump, has an 80% chance of winning. If he takes office, there may be further rate cuts in the second half of the year, with a total of 100 basis points not being a dream.
But the new voting committee has a majority of hawks, and the White House's calculations may not all work out.
When the dollar weakens, the RMB strengthens.
On December 16, the onshore RMB surged to 7.0413, and the offshore reached 7.03724, both hitting a new high in over a year. The 7.0 threshold is just around the corner; the '6 era' is no longer a dream.
Why is it so fierce?
· External: Fed rate cut expectations are weighing down the dollar; the dollar index has already fallen below 99.
· Internal: China's trade surplus skyrocketing
Foreign capital is also voting with their feet, with funds continuously flowing into A-shares.
Institutions have collectively raised their expectations:
· Deutsche Bank: expecting the RMB to reach 6.7-6.8
· Goldman Sachs: RMB is undervalued by 25%; it could reach 5:1 in the long term.
Companies are acting faster. A toy factory owner in Dongguan said: 'As soon as the dollar arrives, I immediately exchange it for RMB.' With year-end demand for foreign exchange settlement building up, RMB buying is stronger.
Experts suggest that companies use a 'lock-in bottom and open top' strategy: by using 'proportional forwards + selling dollar put options' to lock the exchange rate at 6.9-7.0, which both hedges risk and captures the appreciation dividend.
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Three, the AI bubble bursts: tech stocks crash, the first domino has fallen.
Oracle's performance crashed, becoming the first card to fall.
Blue Owl no longer supports its next $10 billion data center deal, Oracle's stock plummeted 6%, Nvidia followed with a 4% drop, and the Nasdaq fell 1.8% at one point.
The signal is clear: tech companies can't sustain cash flow anymore and can't afford the sky-high bills for AI chips. The AI frenzy is coming to an end.
To support the stock market, the US Treasury Secretary even proposed the 'Trump Account' plan: to open ETF accounts for every newborn, holding US stocks long-term, and can only sell when they reach adulthood. Where will the money come from? By taxing the rich. This is essentially the state stepping in to support US stocks.
But the market is not buying it. Gold is again approaching previous highs, and New York gold futures are about to break $4398—risk-averse sentiment says it all.
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Four, a global asset migration: where is the money flowing?
As soon as the Fed adopts a dovish stance, the market immediately reacts:
· 10-year US Treasury yield fell to 4.14%
· US stocks rebounded, S&P 500 rose 0.67%
· Gold surged in the short term, COMEX gold rose by 0.5%
For Chinese investors, this wave is a window period. Historical data shows that during the Fed's preemptive rate cut cycles, A-shares often have structural opportunities:
The main line for 2026 is gradually becoming clear: $ZEC
1. New productive forces: new energy, AI, low-altitude economy—falling financing costs + policy push, making it easy to produce leading companies.
2. Export manufacturing: the dollar is weak, the RMB is stable, profits in home appliances and auto parts need to be restored.
Five, the underlying logic has changed: from inflation to employment, from the dollar to the RMB.
The Federal Reserve has shifted direction; the fundamental reason has changed—from suppressing inflation to preserving employment.
Although core PCE inflation remains at 2.8%, employment deterioration is more urgent. Powell believes tariff-induced inflation is 'transitory'; by the first quarter of 2026, commodity inflation may peak, and cooling service inflation will counteract rising prices.
'Keep the RMB exchange rate basically stable at a reasonable and balanced level.' The meaning is clear: the central bank will use counter-cyclical factors, foreign exchange reserve requirements, and other tools to smooth out fluctuations and prevent unilateral trends from impacting the real economy.
The global capital landscape is silently being reconstructed: Wall Street is starting to doubt the US 'All in AI' model, foreign capital continues to buy RMB assets as a safe haven, and China's trade surplus has hit a historical record... all these clues point to one thing: economic power is shifting.
In 2026, what we face is not a numbers game, but a huge change in the logic of wealth distribution. The Federal Reserve's choices, the strength of the RMB, and the outcome of the AI bubble will jointly determine where your money appreciates in the next decade.
Are you swaying with dollar assets or positioning in RMB assets ahead of time?
$DOGE Is it to continue chasing the tech bubble or to turn to the real economy and emerging tracks?
This game has no spectators.
Where do you think the biggest opportunity will be in 2026? Will the RMB break 7 and enter 6? Will the AI bubble burst and crash the US stock market?
