2 thoughts on “The Fed announced that it may raise interest rates 7 times this year. What signals have been released? What impact does it have on ordinary investors?”
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In order to solve the problem of inflation, economists believe that the inflation rate is worthwhile to be vigilant, but the inflation rate in the United States has reached 7.04%, and in early 2021, this value is only 1.4%. This means that if the Federal Reserve does not care, the United States is likely to fall into malignant inflation, leading to division and social crisis. The best way to solve inflation is to raise interest rates. The United States has faced the threat of inflation many times in history, and almost every time it responds to interest rate hikes. In addition, because the US dollar is the world currency and the United States is the only superpower in the world, the global trade recognizes the US dollar settlement. Therefore, today's globalization of finance, the US dollar around the world will enter the American commercial banks.
In the Fed's interest rate hike, the US 10 -year Treasury yield will increase, which will affect the valuation of global risk assets (stocks). From a historical perspective, interest rate hikes will lead to high valuation industries and individual stocks such as technology stocks plunge, and investors need to participate cautiously. Regardless of US stocks or A shares, the same logic. (U.S. stock risks will be transmitted to A shares). The core logic of the Federal Reserve's interest rate hike lies in international US dollar capital return to the United States. Therefore, countries that have always rely on the US dollar capital to develop the economy are the most affected!
I. The main content of the Federal Reserve's March Conference
1. Rating and shrinkage: The meeting raised interest rate hikes 25bp as scheduled. The meeting statement hinted that it would continue to raise interest rates and will soon begin to shrink the table. At the same time, it is pointed out that the Russian conflict will have an impact on economic activities and exacerbate inflation pressure. Powell reiterated that the economic prospects are highly uncertain, the policy depends on data performance, and expressed its announcement as soon as May.
2. Point-to-line diagram and economic forecast: The latest dot-up map shows that it will raise interest rates 7 times in 2022, and will raise interest rates 3-4 times in 2023. In 2024, it will stop raising interest rates.
3. The expected change of asset prices and interest rate hikes: This meeting did not exceed the expected eagle faction. After the meeting, US stocks and gold fell first and then rose. Not big.
. Release signal: The Federal Reserve ’s interest rate hikes will avoid economic recession as much as possible while controlling inflation. , The difference in the paid point of the US debt is very close to the interest rate hike in 1999. In 1999 Stopping rate hikes, linearly pushing the current PMI level and trend, it takes about 14 months to fall below 55%. In summary, if the Federal Reserve raises interest rates continuously in 1999, it may stop raising interest rates in mid -2023; if the Fed adopts a more mild interest rate hike rhythm, it will have a small impact on the economy, and the time for stopping interest rate hikes will also delay. We think the possibility of the latter situation is higher. Maintain previous judgments: the Federal Reserve is more likely to adopt a policy portfolio of "slow interest rate hike fast shrinkage list". It is expected to raise interest rates 4 times in 2022 (may have 50bp). After the inflation point of Q2 will appear, the rate hike expectation will usher in cooling.
. The impact of the Federal Reserve ’s interest rate hike on A shares: In recent years, the trend of A shares and US stocks has become increasingly converged, and the style switching is also highly synchronized. Shares produce conduction effects. The Federal Reserve ’s interest rate hike will continue to have an impact on A shares in the first half of the year, and the impact effect on growth stocks is expected to be greater; but in the second half of the year, the situation is highly likely to reverse.