Over the weekend, the Fed's statement revealed three details

time:2022-12-09 03:10:58source:chakarski.com author:Aerospace stock
Over the weekend, the Fed's statement revealed three details

Since the beginning of this year, we can see a phenomenon that the US dollar index has started to rise continuously. From the beginning of the year to this week, the US dollar index has risen by 13.75%, and it has also achieved a breakthrough to the sideways range. On the other hand, other non-US currencies can be described as appalling. The yen has fallen 19.58% against the US dollar this year, the euro has fallen 12.38% against the US dollar this year, the Canadian dollar has fallen 3% against the US dollar this year, and the pound has fallen 13.26% against the US dollar this year. The yuan is also down more than 8% against the dollar this year. It can be said that with the appreciation of the US dollar, other non-US currencies are bleak. Why is the dollar so strong this year? The most fundamental reason is the Fed's rate hike. So far, the Fed has raised rates four times this year, and the cumulative rate hike has reached 225 basis points. It is rare to see so many rate hikes in such a short period of time. The reason why the Fed raised interest rates is to curb inflation. However, it is interesting that the US CPI was at 8.5% last month, which was lower than the expected 8.7%. pace. This also gave U.S. stocks some respite, leading to a 6.73% gain for the Dow Jones, a 9.11% gain for the S&P 500, and a 12.35% gain for the Nasdaq last month. . As soon as the Fed's situation slowed down, U.S. stocks immediately began to rebound, which can be described as immediate. As a result, the market's expectations for the Fed to raise interest rates in September began to decline. What is the result? The good times don't last long! Because the Fed made a public statement at an important event, and the Fed's statement this time revealed three details. First of all, as the time enters late August, it is obvious that it will soon enter September. Then, it will be the time when the US Department of Labor will announce the non-agricultural data for August. At this time, the Federal Reserve is suddenly hawkish. . Does it mean that the non-agricultural and other economic data to be released next month are not ideal? Market analysts generally agree that there is such a possibility. Secondly, the Fed also stated: "The current level of inflation is at a historically high level, and policy tools will be vigorously used to combat inflation. Monetary policy measures to reduce inflation may lead to a decline in economic growth and a weak job market." Although the U.S. CPI was lower than market expectations last month, it was still at a 40-year high. The agency staff also said: "It can be seen now that the inflation rate in the United States is still much higher than 2%. Even if it starts to decline now, it is obviously too early to be within the target range previously set by the Federal Reserve." Finally, The Fed also said that it will firmly fight inflation, and more importantly, it mentioned that it will bring pain to the economy, but still said that raising interest rates will still depend on economic data. From his statement, we can get a point that the rate hike by the Fed in September will probably not be weak, and may even exceed the previous few times. Under such circumstances, how can the US stock market get out of the so-called bull market? In particular, the market generally expects the Fed to raise interest rates by 75 basis points next month. Therefore, these are also the details of the three aspects disclosed by the Fed's statement. In the final analysis, the Fed will raise interest rates, but it has shown a very tough attitude in raising interest rates this time, and there are some differences in the previous weak statement. This is what worries the market the most. Moreover, the Fed expressed its willingness to slow down interest rate hikes for a while, and then began to emphasize that it would raise interest rates again, which made the market a little puzzled, and US stocks also fell significantly following some of the Fed's remarks. Raising interest rates is indeed a good solution to inflation, but it is also a double-edged sword. The recent trend of A-shares is also similar to that of the US stock market. The Shanghai Composite Index has experienced a five-wave decline since the beginning of the year, and the Dow Jones Index has also experienced a multi-wave decline since the beginning of the year. The Dow Jones Index began to touch the market in June. The bottom rebounded, and the Shanghai Composite Index started a rebound a month earlier than US stocks. From the overall trend, the linkage effect is still relatively obvious. Therefore, if the U.S. stock market continues to fall next, it is bound to have a great impact on A-shares.
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