Interpreting a market plunge

Tldr; we have no idea

Guys, here is my analysis (which, after reading this article, may shed more light on the matters).

We have had an asset bubble due to low interest rates. Because people don't want to keep money in banks. So we have had a bubble in crypto and stocks etc.

As interest rates rise - and they will, because the government will need to reload for the next QA or whatever - asset markets will keep taking hits.

The question is - why does the central bank really need to raise interest rates? Why not just keep things as they are and not load up on QA ammo?

That depends - are you an Austrian economist? :)

I guess some people have borrowed to invest in crypto money, or worse in stocks, and so need liquidity to anticipate credit raise.

The reason the credit rate might be increased (my guessing) is because lending money creates vritual money and thus inflation. The other reason is because it would allow banks to profit from the european economy recovery. America has currently enough growth to absorb the negative effect of a credit rate increase.

The bigger concern is on the interest rate hikes. Low rates were expected to help kickstart the economy and prices and wages to increase. What has happened instead is that all the cheap money has caused asset inflation. US companies now have record amount of debt.

Too fast increase in interest rates will cause their debt obligations to balloon and lower profitability. Though this will take couple of quarters to fully manifest. So, this is just a reaction in line with Amara's law applied to stock markets- We tend to overestimate the effect of a news item (technology) in the short run and underestimate the effect in the long run. I expect media to be soon cheering another round of upward zag.

But if reacting and lowering them will ease the recession, why not just keep them low in the first place? That way the recession doesn't materialize. Maybe raising interest rates is what causes the recession in the first place!