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The IMF raised the global GDP growth forecast this year, rarely criticizing the unsustainable fiscal policy of the United States.

On Tuesday, April 16th, the International Monetary Fund (IMF) released the World Economic Outlook report and a report on the risks of financial stability. The IMF slightly raised its forecast for global economic growth this year, citing the strong performance of the United States and some emerging markets. However, the IMF also warned that its outlook for the future is still cautious because of inflation and geopolitical risks. The IMF pointed out that high borrowing costs and the withdrawal of financial support measures are putting pressure on short-term economic growth. Due to low productivity and global trade tensions, the medium-term prospects are still the weakest in decades. On the specific forecast data: The IMF expects global economic activity to grow by 3.2% this year, 0.1 percentage point higher than the forecast of 3.1% in January. The IMF's forecast for global economic growth in 2025 remains unchanged at 3.2%. The IMF raised the US economic growth forecast in 2024 from 2.1% in January to 2.7%, and slightly lowered the euro zone economic growth forecast. The IMF predicts that the global average consumer price may rise by 5.9% this year and 4.5% next year, both of which are 0.1 percentage points higher than the forecast in January. Although the market generally expects the Fed to cut interest rates sharply recently, the IMF still expects major developed economies to start cutting interest rates sometime in the second half of this year. It is worth mentioning that in Tuesday's report, the IMF made a rare and direct criticism of American policymakers, saying that the United States has performed well in developed economies recently, but this is partly driven by unsustainable fiscal policies: The recent outstanding performance of the United States is really impressive and an important driving force for global growth. But it also reflects strong demand factors, including fiscal policies that run counter to long-term fiscal sustainability. Excessive spending in the United States may rekindle inflation, and by pushing up global financing costs, it will pose a long-term fiscal and financial imbalance risk to the global economy. Based on the situation in the United States, the IMF warned that something must always be compromised. Pierre-Olivier Gourinchas, chief economist of IMF, said that there are still many challenges and decisive actions are needed. He also pointed out that although the situation in the Middle East has led to an increase in oil prices, it is still too early to judge whether this increase will continue, which is not the benchmark scenario expected by the IMF. In the IMF's report on financial stability risks, Tobias Adrian, its official in charge of capital markets, warned that the recovery of consumer price growth poses a threat: Investors seem to believe that when inflation slows further, data-dependent central banks will loosen monetary policy. However, if inflation remains high, this high expectation may be overturned, which may lead to the sale of related assets, from bonds to stocks to encrypted assets. The consequences of this situation may include tightening financial conditions, some investors suffering losses, and rising bond yields. Rising bond yields will make it more difficult for borrowers to repay their debts. The IMF also said that Russian enterprises have strong investment, Russia's strong private consumption has promoted economic growth, and Russia's expenditure on security has also supported the country's economy. In addition, the IMF predicts that the British economy will become one of the winners of the artificial intelligence (AI) prosperity. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

If the Fed doesn't cut interest rates, what will happen to the US debt?

Last week, off the charts CPI data in the United States triggered the market to sell US debt in succession. After the auction of 10-year Treasury bonds by the US Treasury was cold, investors' selling of US debt further intensified, pushing the 10-year US debt to a high of 4.5%. If the Federal Reserve does not cut interest rates all the time, the environment for the US government to issue bonds for financing will further deteriorate. Interest on debt may become the biggest financial burden of the US government. Last week's CPI data in the United States gave investors the first impression that inflation has not been completely contained, and the Fed may keep high interest rates unchanged in the next few months or even years. James Aubin, chief investment officer of Sierra Mutual Funds, said: "The unexpected CPI data of the United States in March changed investors' views on the direction of the Fed's policy, and the narrative logic of the market changed." High interest rates, for the federal government of the United States, mean that the interest cost of borrowing new debt has been high. According to the Congressional Budget Office (CBO), the expenditure of debt interest in fiscal year 2023 was as high as $659 billion. The trend of rising interest on US debt will even continue. It is predicted that the total US government expenditure on debt interest will reach a record $12.4 trillion in the next decade. Michael Hartnett, an analyst at Bank of America, even predicted that the interest on American debt would reach $1.6 trillion by the end of 2024, surpassing social security expenditure and becoming the largest single government expenditure. According to Torsten Slok, chief economist of Apollo Global Management, in 2024 alone, a record $8.9 trillion of national debt (about one-third of the outstanding debt in the United States) will mature. Under the high interest rate environment, the US government is under great pressure to pay its debts. The supply of American treasury bonds is increasing, and it is becoming more and more difficult to sell! The rising debt and interest, combined with the persistent fiscal deficit, forced the US government to continue to issue bonds and borrow money to fill the hole, and the Fed's delay in cutting interest rates will make the US government debt problem worse. Bill Merz, head of capital market research at Bank of America, said: "Because of the deficit of the US federal government for years, it can only be made up by issuing bonds. The current high interest rate level leads to the rising interest cost, forcing the US government to continuously increase the issuance of national debt to finance. " Since 2020, the United States has continuously released itself on the road of issuing bonds, and almost every quarter, it will send a $4 trillion pressure shock. In the first quarter of this year, the United States issued $7.2 trillion in national debt, the highest quarterly debt issuance record ever. At that time, it didn't issue so much debt to cope with the impact of the COVID-19 epidemic. With the acceleration of US debt issuance and even signs of oversupply, investors are almost unable to buy it. This is also one of the reasons why the auction of treasury bonds in the United States will be cold recently. The Federal Reserve, Japan and Europe are all basic buyers of US debt. Although the recent auction of US debt was cold, some investors chose to wait and see, but the basic disk for buying US debt has always been there, such as the Federal Reserve, as well as investors from Japan and Europe. Of the US$ 34 trillion in debt, about 22% is government debt, and the remaining 78% is public debt. Among these public debts, American creditors account for about 70% and international creditors account for about 30%. Among American creditors, the Federal Reserve is the biggest player, and the rest are mutual funds, pension funds, banks and insurance companies. The traditional artistic ability of the Federal Reserve is to use QE and QT to control the bond purchase plan, and then adjust the balance sheet to achieve the purpose of controlling market liquidity. Due to the signal released in the minutes of the recent Federal Reserve meeting in March to slow down the scale reduction, FOMC members generally agree to halve the scale of monthly scale reduction. This is a small positive for supporting the price of US debt. International investors such as Japan and Europe like to buy American debt. On the one hand, because Japan and many countries in the euro zone have a long-term trade surplus with the United States, there is nowhere to put the dollars with current account surplus. The most convenient thing is to go back to the United States to buy American debt and get some interest while doing a good job in international relations. On the other hand, Japan and the European Central Bank's perennial zero interest rate or even negative interest rate policy make their own bond yields far less than those of US Treasury bonds, and their own bonds fail to live up to expectations, so they can only go to the United States to invest. In particular, after nearly two years of interest rate hike cycle in the United States, the yield of 10-year US debt has exceeded 4%, and the US debt suddenly became fragrant. The U.S. Treasury Department is expected to announce its plan for issuing bonds in the third quarter at the end of April, and then we can see if the appetite for issuing bonds in the United States has increased again. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Business opportunities of Hong Kong's digital economy speed-up camp will increase greatly.

  Photo: Chen Maobo (left) said that scientific and technological innovation has become an important production kinetic energy, and data is an indispensable element. Scientific and technological innovation has become an important production kinetic energy, and data is an indispensable factor. The Financial Secretary, Chen Maobo, pointed out in his blog yesterday that Hong Kong is in a wave of scientific and technological changes, and it is necessary to create new productivity with innovation as the core to promote high-quality economic development. In fact, Hong Kong's digital economy is accelerating, and the development of science and technology is also bringing more business opportunities. In addition, Chen Maobo put forward the idea of future sustainable development in five areas: optimizing digital policy, strengthening digital infrastructure, accelerating digital transformation, sustainable digital talent strategy, and promoting local and cross-border data flow. Chen Maobo said that while R&D, innovation and application of science and technology are important, proper data collection, classification, labeling, management and application are equally crucial. The full implementation of digital operation in different industries and enterprises is not only related to the operating efficiency and competitiveness of enterprises in the future, but also related to the innovation of products, services and business models, as well as providing more personalized services to consumers or corporate customers. He emphasized that scientific and technological innovation has become an important production kinetic energy, and data is an indispensable element. New-quality productivity with innovation as the core is the key connotation to promote the high-quality development of Hong Kong's economy. Set up a digital policy office this year. In 2022, the SAR Government set up the Digital Economy Development Committee, under which several groups conducted in-depth research on cross-border data flow, digital infrastructure, digital transformation and talent development, and collected opinions from the industry and stakeholders. Earlier, the Committee submitted 12 core recommendations to the Government, covering five major areas, providing important reference for the future work of the SAR Government. Some of the recommendations have been reflected in the policy address and the Budget. In his blog, Chen Maobo further elaborated on the five areas of the Committee. The first is to optimize Hong Kong's overall digital policy. He pointed out that the top-level structure and laws and regulations of policy, governance and implementation are the key. When the Legislative Council completes the relevant deliberation procedures, the SAR Government will set up a "Digital Policy Office" in the middle of this year to comprehensively formulate and implement policies to promote the development of digital economy and smart cities. The second is to strengthen the digital infrastructure. In addition to enhancing the use and coverage of 5G networks, it will also encourage the construction of efficient computing centers and data centers, further promote electronic payment, and launch corporate digital identity (Corp ID). The SAR Government has also announced the establishment of an enterprise version of "Smart Convenience", so that enterprises can safely and conveniently authenticate their identities and check their signatures when conducting online transactions or using e-government services, thus avoiding complicated procedures. The "Digital Enterprise Identity" platform is expected to be gradually launched from 2026. The third is to promote local and cross-border data flow, encourage local public and private sectors to open more information, and expand the scope of "business data link" to make it easier for banks to obtain their data under the authorization of enterprises and facilitate the loan approval of SMEs. The fourth is to accelerate the digital transformation. In supporting the digital transformation of SMEs, Cyberport launched the "Digital Transformation Support Pilot Program" at the end of March to help catering SMEs purchase ready-made basic digital eucalyptus. The fifth is to formulate a sustainable digital talent strategy, cultivate and retain digital talents through strengthening education and training, and attract talents and technology enterprises from outside Hong Kong. Tan Yueheng: Hong Kong can give full play to its scientific research advantages. With regard to the development of innovation and technology in Hong Kong, Tan Yueheng, a member of the Chinese People's Political Consultative Conference and a member of the Legislative Council, said that "vigorously promoting the construction of a modern industrial system and accelerating the development of new quality productivity" is the top ten tasks in this year's government work report. Hong Kong is the forefront of the country's development of "new quality productivity", and it can give full play to its scientific research advantages, accelerate the formation of the development layout of "South Finance and North Innovation" through the construction of an international innovation center, and provide a strong impetus for "new quality productivity". Tan Yueheng also said that it is necessary to strengthen financial support for new technologies, new tracks and new markets in the future; Promote financial resources to invest more in the key development direction of the national strategy, and do a good job in five major articles: technology and finance, green finance, inclusive finance, pension finance and digital finance.

VC ETF that can be bought by retail investors, Mujie announced that ARKVX invested in OpenAI.

After Tesla, Sister Mu targeted OpenAI again! Ark Investment, which she manages, said on platform X on Thursday: "Ark Venture Fund has invested in OpenAI, the leader of artificial intelligence". The specific amount of investment has not been announced yet, but according to Mujie's consistent all in style, it will only be more than less. The party OpenAI has not made any statement on this matter. In the past two years, ChatGPT developed by OpenAI has caused a great sensation. With the soaring valuation of the company and the attention of the industry, it is only a matter of time before Mujie takes an eye on OpenAI. This time, Mujie invested in OpenAI through its Ark Venture Fund(ARKVX), which was established in September 2022. Just look at its positions, and you will know that this fund has invested in all technology giants and technology startups, such as SpaceX of Musk, social platform giant X, game companies Epic Games, Discord, Shield AI, etc., all of which Mujie likes. Moreover, the slogan of Ark Venture Fund is also very exciting: it is to make the venture capital that looks tall and civilian, so that all investors can participate in the investment opportunities with the most development potential. It means a lot to advance and retreat with a group of retail investors.

New Federal Reserve News Agency: The question now is not when to cut interest rates, but whether to cut them.

After the CPI data of the United States in March exceeded expectations, Nick Timiraos, a reporter from the Wall Street Journal, who is known as the "New Fed News Agency", wrote that in view of the strong job market and the fact that the inflation rate may stabilize at a level higher than the Fed's target, the outside world may question whether the Fed can cut interest rates later this year without evidence that the economy has slowed down significantly. Timiraos wrote in an article on Wednesday night local time: Higher-than-expected price increases for the third month in a row may return Fed officials to an uneasy wait-and-see state, that is, wait for a few more months to see if there are better inflation data or obvious signs of economic weakness that they hope to avoid. "This will definitely make them lose confidence in the goal of returning inflation to 2%," said Alan Detmeister, a UBS economist who was in charge of the Fed's inflation forecasting department. Bump down or stagnate? As early as the beginning of the year, the Fed was quite optimistic about the inflation situation in the United States. Considering that the inflation rate dropped faster than expected at the end of last year, despite the strong employment and economic growth, they still believe that it will not be too difficult for inflation to fall back to 2%. However, with the CPI data exceeding expectations for three consecutive months, the focus is turning to whether inflation is going down a bumpy road or staying near the current level of nearly 3%. Timiraos believes that the former means that the Fed may postpone interest rate cuts and slow down the pace of interest rate cuts. In the second scenario, if the economy does not slow down significantly, the Fed will probably not be able to cut interest rates. "Basic inflation has declined. We have made progress. Frankly speaking, we have made more progress than I expected a year ago, "said Jason Furman, an economist at Harvard University. "But the progress made now is less than anyone expected three months ago." Timiraos also pointed out that the inflation report in March itself was not noteworthy. Excluding volatile food and energy prices, the inflation rate in March was almost the same as that in February. However, because the inflation data in the first two months were higher than expected, the data once again deviated from expectations, which caused more thorny problems, including whether people misjudged the inflation situation again. Besides, what will happen if the Fed fails to cut interest rates this year? What if investors are too optimistic about the Fed's ability to achieve a soft landing? Will the Fed cut interest rates again this year? "Investors think they can cope with the current situation with ease, which is a bit self-righteous, and I think it is actually quite dangerous," said Peter Berezin, chief global strategist of BCA Research. "The current pricing of the market is based on the expectation of a soft landing, but if there is a second wave of inflation, or the unemployment rate rises and causes a recession, the market will experience a very, very serious sell-off." According to FactSet data, futures contracts linked to the federal funds rate show that traders expect the interest rate to be around 5% by the end of this year, which means that there will only be one or two interest rate cuts of 25 basis points this year. In early January, traders will cut interest rates six or seven times this year. After the unexpected inflation data was released, the Wall Street banks adjusted the interest rate cut forecast for the first time, and canceled the forecast of the first interest rate cut in June. Now, Goldman Sachs and UBS predict that the Fed will cut interest rates in July and September respectively, and only cut interest rates twice this year. Barclays expects the Fed to cut interest rates only once in September this year. Blake Gwinn, interest rate strategist at RBC Capital Markets, said: "The interest rate cut in June is the key to our expectation of three interest rate cuts. If this expectation fails, we think the first rate cut can easily be postponed to December. " Former US Treasury Secretary and "high inflation whistleblower" Summers even said that the possibility of the Fed raising interest rates must be seriously considered. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Can interest rate cuts be expected? The minutes of FOMC meeting tonight are very important.

The signal of renewed inflation became stronger and stronger. Wall Street investment banks took turns to play before the heavy CPI report, throwing cold water on this year's interest rate cut expectation. Hashimoto warned that the Fed's interest rate cut expectation was "off track", and JPMorgan Chase said that he was ready for the Fed to raise the interest rate to 8% at the highest. In addition, the minutes of the FOMC meeting released tonight will become a key force in the expected direction of interest rate cuts. The Fed always likes to use the minutes of meetings to send signals to the market, so the market is always on the alert. Looking back at the policy meeting in March, after the Fed kept interest rates unchanged for the fifth time in a row, it maintained the benchmark forecast of cutting interest rates three times during the year. The chairman of the Federal Reserve expressed his dovish attitude at the press conference after the meeting. It is worth noting that the bitmap shows that there are obvious differences within the Fed on the number of interest rate cuts during the year. In addition, the recent remarks of many senior officials have released obvious hawkish signals, and the degree of differences within the Fed on interest rate cuts will become the biggest highlight of the minutes of the March meeting. The minutes of the FOMC meeting in March will be announced at 2pm EDT on Wednesday (2am Beijing time on Thursday). The following are four key issues in the compilation of Wall Street's information. What is the degree of disagreement within the Fed on interest rate cuts? There are obvious differences within the Fed about the interest rate cut during the year: although Powell has always been a dove, many senior Fed officials have recently made statements in the opposite direction. Richard Moody, chief economist of Richmond Fed, said that it is worth studying the minutes of the meeting carefully to see if the attitude of FOMC members is tougher than Powell's at the press conference. The market is also paying attention to this, and they want to know whether Powell will force the interest rate cut in June in the presence of opposition. According to Stephen Englander, research director of Standard Chartered Bank, at the press conference in March, Powell seemed to imply that he would accept objections. Powell said at the news conference: "We really tried to reach a consensus, and the ideal thing is to agree; Some members expressed their opposition, and this will happen. But life goes on, and that's not a problem. " When will the Fed slow down the pace of reducing its bond purchases? Powell also said at the press conference in March that the general view of the Federal Reserve's interest rate committee is that the pace of bond purchases should be gradually slowed down in a "fairly short" time. He stressed that the Fed has not made any final decisions, and analysts believe that these decisions may be made at the next policy meeting in early May. Derek Holt, vice president of Economics at Scotiabank, said that "quite short" time means that it may start as early as June. Details of quantitative austerity are also important. At present, the Federal Reserve is still reducing its balance sheet at a rate of $95 billion per month, including $60 billion of treasury bonds due and $35 billion of mortgage-backed securities (MBS) due. Analysts believe that the minutes of this meeting will detail the plan of gradual reduction, in addition, the term and composition of the balance sheet will also be discussed. Nomura Securities economists predict that the Fed will plan to reduce the monthly purchase of government bonds by half to $30 billion without changing the size of maturing MBS. How to end quantitative tightening without triggering liquidity crisis? Looking back at history, in 2019, due to the turmoil in the money market caused by the shortage of liquidity, the Federal Reserve had to brake suddenly and terminated its first quantitative easing program. The Fed hopes to end this plan without causing any crisis, but there is no consensus on when to stop. Logan, chairman of the Dallas Federal Reserve and in charge of open market operations, said that slowing down the quantitative tightening "will redistribute liquidity for banks and money market participants and provide more time for FOMC to assess the liquidity situation. This will also reduce the risk of going too far. " Analysts are currently divided on how long and how far quantitative austerity will last. Many people think that the Fed will end before the end of 2024, but others think that it will last until 2025. Goldman Sachs predicts that the Fed's quantitative austerity plan will last until March 2025, when the balance sheet will reach about $6.7 trillion. At present, the assets on the Fed's balance sheet are about $7.5 trillion. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Brad, the former

On Tuesday, local time, former St. Louis Fed President James Bullard said in an interview with the media that cutting interest rates three times this year is the benchmark situation, on the grounds that the inflation rate is moving closer to the Fed's target, while the economy remains flexible. Earlier, he said at the HSBC Global Investment Summit in Hong Kong: "What you see is a very successful policy and a fairly strong economy, so now the Fed is progressing smoothly in many aspects." The bitmap released by the Federal Reserve in March shows that there will be three interest rate cuts this year. At the same time, Federal Reserve Chairman Powell said that the central bank is in no hurry to relax its policies and needs more evidence to show that inflation is continuously easing. The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Inflation has intensified, and the

The resurgence of inflation expectations and the hot labor market seem to support the view that "the Fed is not in a hurry to cut interest rates", and the market interest rate cut expectations continue to decline. Last week, the surge in international oil prices and "hawkish remarks" made by Fed officials caused the three major indexes of US stocks to dive more than 1% in intraday trading, and the "panic index" VIX soared to a high level in the year. This week, US stocks will usher in two major tests: 1. If the March inflation data to be released on Wednesday is higher than expected again, and the strong employment report last week is superimposed, it will put pressure on US stocks. 2. The first quarter earnings season of US stocks will kick off this week, and investors will also pay attention to whether the profitability and prospects of enterprises can support the current high valuation. According to statistics, Wall Street strategists are not optimistic about the performance of US stock companies in the first quarter. The profit growth of S&P 500 companies in the first quarter is expected to be the lowest since 2019, only 3.9%. Since the beginning of this year, Wall Street's interest rate cut is expected to drop from seven times to three times. Now, this figure may further drop, and many economists have warned that interest rate cuts may not be seen this year. CME Fed observation tools show that the market's expected possibility for the Fed to cut interest rates for the first time in June has dropped from 55.2% a week ago to 50.8%. Market pricing of swap contracts shows that traders expect to cut interest rates for the first time in September.

Senior Federal Reserve official "Bi Ying": Director Bowman said that if inflation remains high, it may be necessary to raise interest rates further.

In recent days, a number of senior officials of the Federal Reserve have made intensive speeches, among which there are many statements of "eagle voice". After Minneapolis Fed President Kashkali said on Thursday that the Fed may not even cut interest rates this year, Federal Reserve Governor Bowman, who has permanent voting rights in FOMC, said on Friday that it may be necessary to raise interest rates to control inflation. Bowman recently said that there are some potential upward risks in inflation in the United States. Policymakers need to be careful not to loosen monetary policy too quickly, and may even need to raise interest rates to control inflation. Regarding the above-mentioned interest rate hike argument, Bowman said that although this is not her baseline prospect expectation, she still believes that if inflation stagnates or even reverses, the Fed may need to further raise the policy interest rate at future meetings. Bowman said that she still thinks the most likely outcome is that the Fed will eventually lower interest rates. Bowman clearly pointed out that it has not reached the point of cutting interest rates, because there are still some upward risks in inflation. Lowering the policy interest rate too early or too soon may lead to a rebound in inflation. Looking at it for a long time, it will be necessary to further raise the policy interest rate to restore the inflation rate to 2%. Bowman said that in view of the risks and uncertainties in the US economic prospects, she will continue to pay close attention to the data when evaluating the appropriate path of monetary policy, and be cautious when considering future policy stance changes. When weighing the inflation risk, Bowman said that the improvement from the supply side, which helped to reduce inflation, may not have the same impact on future inflation. In addition, she also regards geopolitical risks and fiscal stimulus, as well as rising housing prices and tight labor market, as other upward risks. The inflation data of the past two months show that the future progress in inflation may be uneven or slow down, especially for core services. Since Bowman took office at the end of 2018, judging from her public speeches, she is more hawkish among Fed officials. Bowman's statement is in sharp contrast with many of her colleagues in the Federal Reserve, because the current main tone is that the next interest rate action of the Federal Reserve is to cut interest rates, not raise interest rates, which is expected by both senior Fed officials and the overall market. However, it should be noted that among the senior officials of the Federal Reserve, the number of people whose positions are becoming hawkish has increased significantly recently: Bostic, the dovish president of Atlanta Federal Reserve and this year's voting committee, has repeatedly said that he only expects to cut interest rates once this year. Minneapolis Fed President Kashkali said the Fed may not even cut interest rates this year. Waller, a popular candidate for the next chairman of the Federal Reserve, said last week that there is no need to cut interest rates in a hurry. The recent US economic data shows that interest rate cuts should be postponed or reduced this year. On Friday, another Dallas Fed President, Logan, said that it is still too early to discuss interest rate cuts, and the Fed is in no hurry to cut interest rates immediately, and there is still plenty of time. Logan agrees that we can't wait until the inflation rate drops back to 2% before cutting interest rates. But overall, the risk of cutting interest rates too early is higher than that of cutting interest rates too late. Worried that monetary policy may not be as restrictive as expected. Need to have a more confident understanding of the direction of the American economy. Logan pointed out that inflation data is more important than employment and GDP data at present. There is growing concern that inflation is deadlocked at a high level, rather than that inflation will pick up. If inflation stops falling, the Fed should be prepared to respond. It is considered that there is a "considerable" risk in the inflation process. Logan also mentioned that the Fed will soon have the opportunity to make a decision on slowing down the contraction. American productivity may be facing a period of strong growth. On the same day, Summers, the US high inflation whistleblower and former Treasury Secretary, said that the surge in non-farm payrolls in March showed that the Fed's estimate of the neutral interest rate level was very inaccurate, and no interest rate cut should be taken in June. He pointed out that the strong employment report shows that the US economy is accelerating again. Considering the "epic" easing of financial conditions and other factors, the neutral interest rate is far higher than the level thought by the Fed. Summers said that he didn't want to prescribe the monetary policy in June, but according to the current facts and trends, he thought it was inappropriate to cut interest rates at that meeting. "I think the more correct way is to keep the interest rate unchanged, which is much longer than the time shown in the bitmap. Although the direction of the next interest rate adjustment is likely to be downward, it should also be downward, but the possibility of raising interest rates is also real." Fed officials and market participants will pay close attention to the CPI inflation data released next Wednesday. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

It is expected to cut interest rates less than three times this year! Investors are now more cautious than the Fed.

After a series of strong economic data were released, American investors' bets on interest rate cuts fell again this year, which was more cautious than the Fed expected. According to media reports, on Tuesday, the swap market only digested the expectation of cutting interest rates by 68 basis points this year, and the number of interest rate cuts was less than three times, which was lower than the 75 basis points expected by the Federal Reserve. At the same time, investors also slightly lowered their expectations for the first time to cut interest rates, believing that the possibility of cutting interest rates in June is only 63%. However, on Tuesday, Federal Reserve Voting Committee Messer and Daley both said that they still expected the Fed to cut interest rates three times in 2024. However, given that the economic growth is still strong, there is no rush to cut interest rates at present, and there is a risk of cutting interest rates too early. Subadra Rajappa, head of US interest rate strategy at Societe Generale, said: The market is obviously trying to overturn the Fed's expectations, the so-called "bitmap", which shows officials' predictions of economic growth and future interest rate cuts, and was last released at the FOMC meeting in March. However, we need to see inflation and other data next week to confirm the postponement of the interest rate cut in June. With the expectation of interest rate cut falling, US debt also fell across the board yesterday. The yield of 10-year US debt once hit 4.386% on Tuesday morning, surpassing the year high of 4.352% set in February, setting a new record this year. However, Rajappa further pointed out that the market still tends to loosen the monetary policy of the Fed this year. I think we will see resistance to a sharp rise in yields, because the tendency of easing policy is still very strong. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.


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