CPT Markets focus analysis: market debate, US aggressive interest rate hike was a mistake!
Although oil prices have not been as high as in the past, the US consumer price index in August is still higher than market expectations, which is different from past values Compared with a monthly increase of 0.1% and an annual increase of 8.3%, experts have warned that the Fed’s aggressive rate hike strategy may continue until 2023.
After the announcement of the consumer price index in August, the market was wailing, and in response to the market’s expectation that the Federal Reserve will continue to raise interest rates sharply, US bond yields jumped across the board that day, not only two-year government bonds The yield rate rose above 3.7%, a surge of 13 basis points, and the ten-year bond yield also rose by 9 basis points to 3.46%. As expected, U.S. stocks were also miserable. It gapped and dropped more than a thousand points, which is really ugly.
Officials are focusing on what is the main reason for the increase in inflation. It is obvious that it comes from food, transportation and rent. Among them, the inflation of rent is the most tenacious. Pay attention to the details of inflation, and you can find that other items also maintain continuous rise. The food index The housing price, which accounts for about one-third of the CPI weight, jumped 0.7%, a 6.2% increase from the same period last year.
And this wave of CPI report is actually good news for laborers. Although adjusted for inflation, real wages fell by 2.8% compared with the same period last year, but they rose by 0.2% compared to July. After the U.S. economy hits the strongest growth rate since 1984 in 2021, this year's growth appears to be mediocre, or even worse than expected. However, the main reason for suppressing economic growth is inflation.
In order to curb stubbornly high inflation, the US Federal Reserve has raised interest rates several times this year. Cathie Wood, founder of ARK Investment Management, said that she actually does not agree with this move. She said that commodities Prices are falling and shipping rates are also trending down, signs that supply chain problems are easing.
At the same time, the price of gold is gradually stabilizing, crude oil prices also fell 35% from the high point, plus, she expects the US economy may fall into recession, these factors will further reduce the pressure on inflation. Wood said more bluntly that the Fed pays too much attention to lagging indicators such as employment data and core inflation rate, but ignores other leading indicators. The Fed's interest rate hike strategy will prove to be a major mistake in the future.
The US economic outlook is increasingly bleak. After the technology industry, the financial industry has also begun to downsize personnel. The reason is nothing more than the deterioration of the general environment and the rapid shrinkage of the investment banking business. Here, I want to point out the initial public offering of stocks and garbage issuance of bonds.
Wall Street may be preparing for the first wave of layoffs after the outbreak, such as JPMorgan Chase , Wells Fargo , or Citigroup , they have abolished the mortgage department personnel in recent months , this business expanded significantly during the epidemic, but unlike in the past, they had to downsize after the business weakened.
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