The U.S. Economy

Analyzing the Core Contradictions of the U.S. Economy In this issue, we focus on the most acute structural contradictions currently plaguing the U.S. economy, and how these contradictions will shape the future direction of interest rate policy. Many people harbor unrealistic expectations that the Federal Reserve will cut interest rates, believing that a simple rate cut will solve all problems. This view completely overlooks the fundamental paradigm shift that has already taken place in the global economy. ...

I. Policy Shift Following the Jackson Hole Symposium At the 2025 Jackson Hole Symposium, the Federal Reserve made significant adjustments to its interest rate policy, addressing both the short-term path and the long-term monetary framework. In the short term, Powell explicitly acknowledged that current interest rates are in a restrictive range (above the neutral rate) and are already dampening economic growth, effectively opening the door to a rate cut in September. ...

The Illusion Behind the U.S. GDP Data for Q2 2025 In the second quarter of 2025, U.S. GDP grew by 2.96% year-over-year. On the surface, this appears to be a strong rebound from the -0.51% recorded in the first quarter, but it is essentially a statistical sleight of hand resulting from accounting rules. To understand the true meaning of this data, we must first clarify the fundamental differences in how the United States and China calculate GDP. ...

The Core Framework of Trump’s Economic Agenda Since the campaign began, Trump’s economic policies have consistently revolved around three core elements: tax policy, debt management, and interest rate control. The ultimate goal of these three elements is highly aligned: to reverse the United States’ long-standing twin deficits in trade and the budget. Tariff and income tax reforms directly address the trade deficit, while the combination of debt and interest rate policies aims to alleviate pressure from the budget deficit. These three elements influence and depend on one another, forming a relatively comprehensive yet internally contradictory policy framework. ...