#时事热点头条说#
The latest economic data released by the US Department of Labor showed that the US CPI increased by 3.7% year-on-year in August, the highest since May this year, and has recovered for the second consecutive month.
The month-on-month CPI growth also accelerated to 0.6% in August from 0.2% in July, the largest month-on-month increase in 14 months.
As soon as the news came out, the NASDAQ fell more than 180 points, the S&P fell 27 points, the Dow edged down 8 points, and spot gold continued to sparkle, trading around $1934 / oz.
It can be seen that the market's expectations are very pessimistic, in order to fight inflation, the Fed raised interest rates for a full year and a half, everyone is struggling to insist, just when they thought they could breathe a sigh of relief, the inflation data rebounded across the board.
Now it seems that further interest rate hikes by the Fed may be inevitable, and the United States will be destined to stage a "winter shock".
Will the Fed continue to raise interest rates?
Every time inflation in the United States is formed, it is inevitably accompanied by a cycle of sharp interest rate hikes, and this time is of course no exception.
Since last March, the Fed has been in the mode of frenzied rate hikes, which lasted for a full year and a half, and only in the first months of this year, the US inflation data significantly eased.
Taking June this year as an example, according to data released by the US Bureau of Labor Statistics, the year-on-year increase in CPI fell back to 3%, which was not only lower than the expected 3.1%, but also fell for 12 consecutive months, the lowest since March 2021.
It can be said that at this time, there is only one step left from the Fed's long-emphasized goal of reducing inflation to 2%.
For a while, the market widely expected that the Fed would stop raising interest rates, and many institutions predicted that the Fed would not only end the interest rate hike cycle, but also start the interest rate reduction cycle soon.
But with the US CPI rebounding again to 3.7% in August, it proved that everyone was too optimistic before, and the "stickiness" of inflation is far more stubborn than everyone thought.
For the Biden administration, "reducing inflation", which has been emphasized countless times, is undoubtedly still the number one priority.
At the beginning, due to the epidemic, in order to stimulate the economy, the United States frantically started the printing press and put a huge amount of water, but it was accompanied by the great inflation that continues to this day.
Prices have skyrocketed, and the relief money distributed during the epidemic has been spent, resulting in a large proportion of Americans living on credit cards and huge debts.
As of June, Americans owed $1.03 trillion in debt, a 20-year high.
It can be said that no one feels the pain caused by inflation more deeply than the people of the United States.
Therefore, for the Biden administration, how to completely beat the inflation that Americans hate the most before the next election is the first priority at present, which is a necessary means to please voters.
As for a series of side effects such as thunderstorms in the banking industry and corporate bankruptcy layoffs brought about by interest rate hikes, after all, it will take a period of time to fully reflect them, which is an "important and not urgent" event.
Therefore, even though the Fed paused interest rate hikes twice in a row in July and September, Powell continued to hawkish, saying that the Fed is likely to continue to raise interest rates.
As things stand, even the most optimistic scenario is that the Fed will not raise interest rates for a long time, far exceeding previous market expectations.
The "shock of winter" is destined to be staged
As we mentioned earlier, "anti-inflation" is the primary goal of the Biden administration today, so the next continued tightening will be inevitable, and this sudden reversal of market expectations will give Americans a little "shock" in the following winter.
First and foremost is the U.S. banking sector.
Since the beginning of this year, the US banking industry can be described as turbulent, first Silicon Valley Bank, Signatory Bank, and First Republic Bank of the United States have exploded one after another, causing everyone in the financial market to be at risk.
Then, in August, not long before reassurance, international financial institution Moody's downgraded the credit ratings of 10 U.S. banks, followed by S&P downgrading the credit ratings of five U.S. regional banks, and also rated the outlook of two other banks as "negative."
Not to mention continuing to raise interest rates, even if the Fed continues to maintain the current high interest rates, many US banks may not be able to hold on.
Coupled with the continued surge in the scale of US debt, which has now exceeded 33 trillion, whether the principal can be repaid is not to mention, now the Biden administration's finances continue to be tight, and even interest repayment has become a problem.
But the problem is that "the landlord's family has no surplus food", the Biden administration is stretched, the fiscal deficit has repeatedly reached new highs, even if it is known to drink to quench thirst, the game of US debt snowballing must continue to play.
Once interest rates continue to rise, it will undoubtedly bring greater pressure on the United States to repay interest rates, and in the event of a real thunderstorm in US debt, the US government may stop directly.
How is China responding?
The global economy is integrated with each other, and the impact of the US interest rate hike must have been deeply experienced by everyone.
So now that the US will continue to raise interest rates, how should we respond?
First of all, it is foreseeable that the RMB will continue to be under pressure in the short term, but if you really want to say "break 8 and break 10", the probability of long-term weakness is not large.
As the dollar index strengthened, the trend of passive depreciation of the renminbi remained unchanged, and as of September 19, the offshore yuan reached 7.29, while it had fallen to a low of 7.36 before the central mother's shout, which was the level of the 2008 financial crisis.
But let's not forget that if we want to maintain the stability of the RMB exchange rate, there are simply not too many weapons in the toolbox of the central mother.
For example, at the special conference on the self-discipline mechanism of the national foreign exchange market held in Beijing some time ago, the central bank clearly stated:
"The financial management department has the ability, confidence and conditions to keep the RMB exchange rate basically stable, and it will strike when it is time to strike."
"Resolutely deal with behaviors that disrupt market order and resolutely prevent the risk of exchange rate overshoot."
The sound landed, and the offshore yuan rose by more than 700 points on the day, which is enough to show the strong control of the central mother's control over the yuan.
Secondly, looking at the PPI in August, manufacturing PMI data, social financing scale, etc., all show that although the mainland economy is still below the boom and bust line, the economic downward range has been reduced, and there are signs of bottoming out.
So even if the United States chooses to continue to raise interest rates, it will definitely have an impact on our economy, but the impact will not be too great, after all, it has survived in the past 1 year.
And in order to stimulate economic recovery, the mainland has also been making efforts.
For example, a series of policies on interest rates and real estate, 3-year and 5-year time deposit interest rates have been directly reduced by 25 basis points, the down payment ratio for the first home has been reduced to 20%, and the interest rate of existing housing loans has been reduced, etc., which will hedge the negative impact of rising interest rates in the United States.
Of course, the recovery of domestic demand is limited by many factors, and how much of a role these benefits can play will need to wait until the next quarter's data to verify.
Written at the end:
US inflation has rebounded, farther and farther away from the 2% target, and further tightening by the Biden administration is inevitable.
But for the mainland, the impact may not be as big as imagined, as long as it maintains strategic concentration, promotes high-quality development, and improves economic resilience and risk resistance, it is enough to have the last laugh.