The US January CPI data once again "exploded", once again pulling up the expectation of interest rate hikes, how will it affect the A-share market in the future?
Last night, the U.S. Department of Labor released data showing that the January CPI rose 7.5% year-on-year. The CPI reached its highest level since 1982, up 5 percentage points from 7 percent in December. Affected by this news, the forecast for a 50 basis point rate hike in March also increased from 30% to 50%, which also led to an overnight shock in us stocks.
Here are three questions worth pondering:
1. Why did the Fed's quantitative easing put so much inflationary pressure on the United States?
Under normal circumstances, the US dollar, as a global currency, is loose in reserves, opens the floodgates to the world, and transmits money from global economies, bringing huge inflationary pressure to global economies, while the United States' own inflation will not rise, and other economies around the world will bear the risk. But this time it seems to be different, at least our CPI has remained low during this period. Can it be understood that this time the dollar flooded, we did not let it flood the domestic market? As the world's second largest economy, we have successfully fought floods, and without a large influx of money and a flood area for the US dollar, a large number of floods will naturally remain in the original place, pushing up the water level of the floodplain.
2. Such a high CPI, inflationary pressure is so great, the Fed has repeatedly blown winds to push up interest rate hike expectations, there is still no clear decision? As a rule, while disturbing regional unrest, Lao Mi is about to start raising interest rates, accelerating the return of dollars and reaping the fruits of labor in other economies around the world. However, even though the CPI is so high, the Fed has not made a clear decision so far. My understanding is threefold: First, the dispute between the old rice in Russia and Ukraine, all parties disagree, this time at the doorstep of european partners, the partners do not seem to fully agree with the outbreak of war; second, the DOMESTIC ECONOMIC RECOVERY IN the United States will take time, and it will take time to reshape the manufacturing industry; on the other hand, it is precisely our resolute not to become a floodplain this time, and the harvest of old rice cutting leeks will be less than expected.
3. Is the tariff removed or not abolished? On the one hand, the US Department of Commerce put pressure on us to say that we did not achieve the goal of the first stage of commercial negotiations, and our Department of Commerce asked the US side to cancel the tariffs imposed earlier. At first, the purpose of the unreliable tariffs was to increase the cost of mainland enterprises in the United States, reduce our competitiveness in the US market, and thus promote the return of manufacturing to the United States, but we did not expect the outbreak of the epidemic, the return of manufacturing industry was not enough, after a large number of currencies were over-issued, resulting in tight supply chains in the United States, imbalance between supply and demand, resulting in a very high rise in inflation. At this time, if the tariffs are removed, it will inevitably have an impact on the returning manufacturing industry; if the tariffs are not removed, it will have to bear high inflationary pressures.
The story between China and the United States will become more and more complicated, a long history of twists and turns, ups and downs, we will wait and see.
In summary, I personally still believe that today's A-share market may be briefly affected by the shock and decline of US stocks, but the operation of A-shares will generally maintain its own rhythm.
