Chairman Powell’s unusual warning of market overheating… The serious reason is margin debt?

🚨 Chairman Powell’s unusual warning of market overheating… The serious reason is margin debt?

📈 Current U.S. stock market conditions

The S&P 500 is up more than 2% for 107 days, its longest record since July 2024.

Unprofitable non-profit tech companies, in particular, have surged 21% since late July, revealing full expectations for the resumption of the rate-cutting cycle.

💰 The most dangerous sign is that margin debt invested in debt has topped $1.1 trillion.

⚠️ Why margin trading is risky…

Buying $100 Stock Borrowing $50
If the stock falls by $20 → the actual loss rate is 40%.

The problem is that there is a systemic risk that if you invest in debt, falling below your equity ratio of 25%, you will be forced to sell, and selling pressure could explode. 📉

🏦 The gap between the Fed’s dilemma and the real economy

The problem is that the current rally in the market is due to expectations for liquidity, not a recovery in economic fundamentals.

But what if the Fed doesn’t cut interest rates as expected? $1.1 trillion in margin debt could be a bomb.