A diagram to understand the basic logic of monetary policy interest rate cuts/interest rate hikes

Interest rate cuts are the most direct factors that provide liquidity for the currency circle and U.S. stocks.
For a better understanding of the brothers, this diagram is supplemented.

Interest rate cuts stimulate investment and consumption by reducing financing costs→ release liquid→ity→ stimulate investment and consumption and push up the price of risky assets (stocks/currency circles)

Raising interest rates raises the price of funds→ shrinks liquidity→ curbs inflation, overheated → suppresses asset valuations.

The core path of monetary policy: policy interest rate→ market liquidity→ revaluation of corporate/personal credit → asset pricing→ adjustment of economic expectations, forming an investment chain impact on the stock market, currency circle, bond market and exchange rate.