In the intricate realm of global economics, few dynamics are as closely monitored as the trajectory of the United States economyToday, the U.Seconomy appears to be at a critical juncture, grappling with multifaceted challenges and looming crises that command worldwide attention.

Since the Federal Reserve's interest rate hike in November 2022, expectations have shifted towards a slowing pace of increasesInitially, the central bank had planned to implement two hikes of 25 basis points each, aiming to stabilize rates around 5%.

However, the scenario took a dramatic turn in March.

The U.S

appeared to pivot sharply, considering a more aggressive approach to rate hikes, perhaps spurred by external political pressures following the postponement of Secretary of State Antony Blinken's visit to ChinaFaced with unmet expectations, the central bank contemplated a steep hike— doubling the anticipated increase from 25 to 50 basis points, testing the waters in a bold manner.

As the date of the rate increase approached, speculation intensified across financial marketsWould the Federal Reserve opt for a cautious hike of 25 basis points or embark on a more aggressive 50 basis point leap? This decision had the potential to significantly steer the future of the American economyIt underscored a choice between relatively conservative high-level fluctuations and a potentially disastrous aggressive strategy.

Ultimately, March's rate hike concluded at the expected 25 basis points, suggesting that the barrage of high-profile maneuvers from key figures like Powell, Blinken, and Treasury Secretary Janet Yellen, was perhaps little more than a show of force; they reverted to the original plan.

Why did the United States shy away from more radical rate hikes?

The answer lies within its borders

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In early March, just as Powell signaled intentions for aggressive hikes, Silicon Valley Bank faced a catastrophic failure, followed quickly by troubles at other smaller banks such as Signature Bank and First Republic Bank.

These events served as a significant wake-up call for the Federal Reserve, compelling it to reconsider aggressive rate alteration plans under pressure of actual market turmoilWhether this was serendipity or indicative of deeper internal strife remains unclear, yet there is certainty that the financial situation within the United States had soured decisively, with market forces ultimately nudging the Federal Reserve back toward its safeguarded path.

Moreover, the Fed initiated large-scale currency swap agreements with various global central banks—including the ECB, BoE, BoJ, and Swiss National Bank— signaling its intent to stabilize global financial markets and fend off a systemic collapse.

Concurrently, the U.S

took measures to counteract domestic liquidity contraction stemming from capital outflows, including a minor 0.25% reserve requirement reduction to inject liquidity back into the system.

On the international front, the U.Saccelerated diplomatic initiatives, seeking to identify supportive elements and maneuvering room within the shifting landscape of global economics.

Nevertheless, while the U.Smanaged to steady its situation temporarily, the crisis remains unresolved.

In reality, the U.Seconomy conceals critical time-bombs that could instigate substantial upheaval, and these problems cannot be alleviated merely through monetary stimulus.

The first issue is the staggering national debt, which has surpassed $31 trillion, a situation graver than during the 1980s

Although current interest rates are not at the staggering 20% heights of that era, the occurrences of bank failures imply that the United States economy is no longer able to withstand such pressures.

Deteriorating bond prices have emerged as a primary catalyst for these explosive risksWere the bond market to experience severe turbulence, the repercussions would devastate the financial ecosystem both domestically and globally.

The second, and arguably more alarming, issue centers around corporate debt, which currently stands at an unprecedented $10 trillionEven if the Federal Reserve could flood the system with cash, filling such a profound pit of corporate liabilities would prove impossibleCompanies during the pandemic’s monetary ease era, heavily borrowed to elevate stock buybacks during the bull market, crafting an illusion of sustainable growth.

However, rising rates, coupled with a declining stock market, indicate that many corporations find themselves unable to fulfill the profit expectations promised at the time of debt issuance

Consequently, major tech firms have embarked on waves of layoffs, while small businesses are suffocating, particularly those impacted by the fallout from Silicon Valley Bank.

Adding to the dilemma, corporate debts often exist as securitized assets traded widely across marketsThis creates a complex web where virtually all financial institutions become ensnared in the inherent risks.

Among these, approximately $2 trillion in sub-prime corporate debts resemble ticking time bombsThese bonds yield high returns but come with significant risk, and should they default, the repercussions ripple through the entire corporate debt ecosystem.

The stagnant economic backdrop means these obligations are poised for potential default, and once triggered, the cascading fallout could overwhelm even the U.S

Federal Reserve's response capacity.

In addition to national and corporate debt issues, another pervasive concern for America is rampant inflation.

The Fed’s intended strategy of controlling inflation through rate hikes and tapering the balance sheet has backfired, resulting in a perplexing cycle of tight monetary policy accompanied by liquidity injectionsRecent statistics indicate that in just one week this March, the Fed's balance sheet ballooned by roughly $100 billion to $8.78 trillion, countering the projected monthly taper of $95 billionThis contradictory approach has exacerbated inflationary pressures.

Though American citizens seem to exhibit a certain degree of "tolerance" toward inflation, even witnessing peculiar phenomena such as “zero-cost purchases,” this facade cannot mask the grave societal crises lurking beneath inflation's surface.

Currently, the U.S