Refer to today's Hong Kong "Oriental Daily" article, analysis of the United States interest rate hikes has become a foregone conclusion, and the number of times in the year will be to seven US trendy interest rate hikes Fed suddenly next week meeting Goldman Sachs estimated that the year to add 7

You can refer to the Article of the Oriental Daily in Hong Kong today, and the analysis of the US interest rate hike has become a foregone conclusion, and the number of times in the year will be seven

The U.S. trend is frantically raising interest rates

The Fed suddenly meets next week at Goldman Sachs to add seven more times during the year

U.S. inflation is out of control, the Fed's interest rate hikes or sharper than expected, will trigger a major shift in global funds, a "new currency war" is about to be staged, countries must change the past practice of devaluing their currencies to stimulate exports, instead of tightening monetary policy, they must also try to make the local currency appreciate to alleviate the pressure on import inflation. In contrast, the relatively low consumer inflation in the mainland has become a major advantage, there are enough currency "ammunition" to deal with the risk of economic slowdown, AND assets will provide a more reliable investment option for the world, or become a "watershed" battle in the Sino-US game!

After the U.S. inflation data hit a nearly 40-year high in January, the Fed finally couldn't hold back and began to accelerate its action. The Fed made a low-key announcement on its website that it would hold a closed-door meeting next Monday on Valentine's Day to discuss discount window rates and prepayment rates. The market interpreted this as the authorities may tighten monetary policy early, and is more worried that the Fed may have raised interest rates early and urgently before the official Federal Open Market Committee (FOMC) meeting in March! At the same time, Wall Street banks have also raised their interest rate hike expectations, and asset management firm BlackRock has called on the Fed to stop quantitative easing (QE) immediately.

The Fed adjusts its currency policy through two indicator rates, including the Fed Fund Rate (FFR) and the Discount Rate mentioned in the FOMC rate meeting. The "U.S. rate hike" is often referred to as the federal funds rate, which is also the most important indicator of the market because of its direct impact on both consumer and corporate loans.

The federal funds rate is set by the FOMC meeting as a "target range" and controlled through monetary policy tools. As for the relatively slight impact of the discount window interest rate, it is more the attitude of the authorities' monetary policy, but it will also affect the financing costs of financial institutions. Because the Fed hastily convened a meeting to discuss discount window interest rates after the inflation data was released this time, it is inevitable that the market will speculate. It is estimated that the authorities may raise the discount window interest rate first, paving the way for more aggressive "water collection" measures in the future.

St. Louis Fed President Bullard has publicly stated his support for raising the federal base rate by one percent by July 1 and then starting to cut the balance sheet significantly. He said bluntly that he was open to convening an extraordinary meeting to raise interest rates urgently. Richmond Fed President Barkin is also open to raising interest rates by half a cent at future FOMC meetings.

BlackRock called for an early stop for the wide range

The market has also begun to worry about the possibility of an emergency rate hike. Tim Duy, chief economist at SGH Macro Advisors, said that even if the Fed announced an immediate rate hike, it would not be surprising, in a sense, this is just a continuation of the Fed since last November.

Rick Rieder, director of fixed income investment at Wall Street bank BlackRock Global, said the Fed needed to respond to the current high inflation problem and immediately stop quantitative easing early, not waiting until March to end the delisting.

Citi's latest forecast is that the Fed will raise interest rates by 0.5% at its March rate meeting, accumulating a 1.5% increase in interest rates for the whole year, according to the bank's economist Andrew Hollenhorst, who pointed out that the Consumer Price Index (CPI) in January showed that core inflation continued to spread at the 6% level and spread more broadly. Goldman Sachs pointed out that in view of the attitude of several Fed officials, the authorities may choose a longer interest rate hike path, starting in March with a rate hike of 0.25% per meeting, and a total of 7 rate hikes throughout the year, a total of 1.75%.

The market questioned Biden's ability to govern

The Misjudgment of inflation in the United States has greatly reduced the credibility of its monetary policy. The U.S. Economic Council and the U.S. Chamber of Commerce released a survey of corporate chief executives (CEOs) that persistent supply constraints and rising labor salaries suggest that U.S. inflationary pressures will persist even if the Fed accelerates interest rate hikes as expected. Nearly 75% of CEOs said that interest rate hikes are unlikely to quickly depress inflation, and the CEO confidence index has dropped from 82 in the second quarter of last year and 65 in the fourth quarter to 57 in the first quarter of this year, reflecting that the confidence of enterprises in President Biden's ability to govern the economy has been greatly reduced, giving a slap to Biden who continues to emphasize that inflation will fall!