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On September 17th, the Federal Reserve finally announced a 25 basis point cut to the federal funds rate target range. This marked the first rate cut since December 2024. Looking back at history, Fed rate cuts have typically acted like a shot of adrenaline for both the U.S. and global economies. This time, however, the effect has been more like a watered-down Americano.<\/p>\n
This diluted impact was immediately visible across global markets. Unlike some past easing episodes that coincided with large commodity or emerging-market rallies, the immediate market reaction this time was muted: the U.S. Dollar Index<\/a> actually ticked up modestly on the day, closing around 96.87 for a gain of about 0.25%. Meanwhile, the Cboe VIX<\/a> volatility index slipped from 16.36 to 15.72, a decline of roughly 3.9%, indicating subdued short-term market fear. Most tellingly, major central banks in Europe and the UK stopped short of signaling any move to match the Fed\u2019s cut. Instead, policymakers stressed, as Reuters<\/a> reported, that future decisions would be guided by their own domestic economic data and inflation outlook.<\/p>\n Many analysts and Western media outlets attribute this to the cut being too small, arguing 50 basis points would\u2019ve been the magic number to really move the needle. But Chinese strategist Professor Wang Xiangsui points to three U.S. deep-rooted problems that have made the global economy essentially \u201cresistance\u201d to this medicine.<\/p>\n First, America\u2019s shrinking slice of the global pie. Back in 2000, the U.S. accounted for about 30.29% of global GDP. However, that\u2019s dropped to around 26% today. When your relative economic size and contribution to global growth are declining, it\u2019s pretty obvious why your domestic policies don\u2019t pack the same international punch they used to.<\/p>\n Second, manufacturing has basically withered away. Manufacturing\u2019s share of U.S. GDP has shrunk from 16% in 2000 to just 10% today. Take semiconductors \u2013 sure, America still dominates design and R&D, capturing 50.4% of global chip revenues. But its share of actual manufacturing capacity has plummeted from 37% in 1990 to a mere 10% in 2022. This decades-long hollowing out of manufacturing means America barely participates in global trade and supply chains anymore. Meanwhile, the service sector that\u2019s increasingly dominating GDP has limited global reach. A barista in New York might pour the world\u2019s best latte, but customers in Shanghai won\u2019t fly in daily to enjoy it.<\/p>\n Third, and this is the big one that Western media keeps ignoring, Trump\u2019s tariff war that kicked off in April. This strategy might have boosted short-term government revenues, but it\u2019s already started cutting America out of global economic activity. Other countries\u2019 central banks have begun adjusting their monetary policies to march to their own beat rather than blindly following the U.S, even begun to consider de-dollarization seriously. In other words, Trump\u2019s trade war has already diluted the power of dollar rate cuts.<\/p>\n All three factors show that weakening rate cut effectiveness isn\u2019t some temporary glitch, \u00a0it\u2019s the inevitable result of America\u2019s overall economic decline, just accelerated by Trump\u2019s shortsighted tariff blitz. As Professor Wang puts it, this combination of chronic deterioration and acute inflammation can\u2019t be cured just by upping the dosage. And if you want to understand what\u2019s really ailing the American economy, this rate cut\u2019s motivation gives us all the clues we need.<\/p>\n Generally speaking, Fed rate cuts fall into two categories: preemptive cuts, gentle adjustments to prevent potential problems; and rescue cuts, desperate measures to address existing crises. The heated friction between Trump and Powell over this cut makes it pretty clear this wasn\u2019t some far-sighted \u201cpreemptive\u201d move. Trump\u2019s pushing for cuts to offset dismal nonfarm payroll employment, trying to create the illusion that he\u2019s delivered on his \u201cbring manufacturing back to America\u201d promise before facing midterm elections. Meanwhile, Powell\u2019s reluctant to mess with the bond market\u2019s cash cow and would rather just remove nonfarm employment from the criteria for rate cuts altogether.<\/p>\n This reveals that America has essentially split in two: one half desperately needs a bailout, represented by Trump and Silicon Valley\u2019s right wing, urgently needing more Fed cuts to boost employment and funnel investment back into manufacturing and tech to \u201cMake America Great Again.\u201d The other half wants to maintain the status quo, the financial establishment backing Powell, in order to preserve the appeal of U.S. Treasury markets. The massive spreads on U.S. Treasuries have fed their sprawling empire and intricate networks of interests.<\/p>\n Think of Wall Street as a giant tree that has long overshadowed the entire forest of the U.S. economy, stifling other sectors and pushing manufacturing abroad. Now, the economic \u201csoil\u201d is eroded, and public anger is forcing this tree to finally shed a few leaves. In this context, the Fed\u2019s minimal rate cut seemed like a few drops of water for a forest fire, leading many to ask: is this really enough?<\/p>\n Professor Wang emphasizes that compared to how much they cut or should have cut, the act of cutting itself matters more. It shows that during Trump\u2019s term, he finally forced Powell to concede, demonstrating he can pressure establishment elites, and that\u2019s his primary political goal as midterms loom.<\/p>\n For short term, Trump finally has something to show voters. But long term, the real root of America\u2019s economic illness, the selfishness and antagonism between its two major economic sectors, remains fundamentally unresolved. If Trump truly wants to achieve \u201cmanufacturing reshoring,\u201d America is still missing three crucial things:<\/p>\n No Hands to Build<\/p>\n Rate cuts are just a tool to boost U.S. non-farm employment, but re-industrialization isn\u2019t as simple as throwing people and machines into factories together. Rebuilding America\u2019s manufacturing competitiveness means producing high-quality, affordable goods, and that requires skilled workers and engineers to keep production lines running smoothly and efficiently.<\/p>\n The biggest damage from industrial hollowing-out wasn\u2019t losing production lines, orders, or even specific technologies. It was that when the entire manufacturing sector withered, the educational system for training engineers became a house of cards.<\/p>\n Sure, American universities might still pump out cutting-edge patents in the short term, but idle factories can\u2019t train qualified engineers and skilled workers. This ultimately means American technology can no longer take root and flourish on American soil. Boeing once commanded global respect because skilled workers and engineers could meticulously turn those beautiful blueprints into reality. Today, America still produces world-class fluid dynamics research, but Boeing factory workers can\u2019t even properly tighten basic screws. Whistleblowers like John Barnett tried to restore Boeing\u2019s engineering culture and get basic quality control right. But what disappeared wasn\u2019t the problems on the production line \u2013 it was the people pointing out those problems. This might be a unique challenge America faces in re-industrialization.<\/p>\n Silicon Valley obviously sees AI as some kind of miracle cure-all, hyping up \u201clights-out factories\u201d powered by intelligent robots as the solution to everything. But this is really just a marketing gimmick to attract investment.<\/p>\n In reality, the more automated and intelligent a factory becomes, the higher the demands on maintenance staff and equipment engineers. They need to figure out how to ensure everything runs within normal parameters without human intervention through careful pre-planning.<\/p>\n Manufacturing involves many steps, and slight changes in any one step can trigger chain reactions that ultimately paralyze the entire production line. A worn cutting tool here, a loose fixture there, these accumulating deviations in automated assembly lines can cause major problems if subsequent steps assume everything\u2019s normal and continue processing.<\/p>\n That\u2019s why detection is absolutely crucial in industrial production, catching any deviations or problems and correcting them immediately. For manned factories, this is relatively straightforward, any basically trained worker could handle easily require debugging and maintenance when machines do them. However for a \u201clights-out factories,\u201d every change in production standards demands separate parameter adjustments and detailed optimization.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2025\/09\/Trump_showing_a_chart_with_reciprocal_tariffs-768x623-1.webp\")
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A door panel blew off an Alaska Airlines Boeing 737 MAX at 16,000 feet, forcing a emergency landing in 2024<\/p>\n
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From James Watt\u2019s invention of the first centrifugal governor in 1788, engineers continued to refine its purely mechanical design throughout the 19th century.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2025\/09\/wechat_2025-09-22_141833_589.webp\")
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