16, the Federal Reserve's Federal Open Market Committee (hereinafter referred to as FOMC) announced that it would raise the federal funds rate by 75 basis points to a range of 1.50% to 1.75%. This was also the first one-time interest rate increase of 75 basis points by the Fed since 1994.
U.S. stocks fell immediately after the news was announced, but quickly rose after Federal Reserve Chairman Powell said that a 75 basis point interest rate hike would not become the norm. The three major U.S. stock indexes collectively closed higher. The Dow rose 303.70 points, or 1.00%, to 30668.53 points; the Nasdaq rose 270.81 points, or 2.50%, to 11099.16 points; the S&P 500 index rose 54.51 points, or 1.46 points %, reported 3789.99 points.
This is also the third interest rate increase by the Federal Reserve this year. In March this year, the Federal Reserve raised the federal funds rate target range by 25 basis points from a level close to zero. In early May, the Federal Reserve announced another 50 basis points interest rate hike.
Source: Federal Reserve official website
Federal Reserve Economic forecasts show that the Federal Reserve has significantly raised its expected level of policy interest rates this year, rising to more than 3%: the FOMC expects the federal funds rate at the end of 2022 to be 3.4% (it was expected to be 1.9% in March ); the federal funds rate is expected to be 3.8% at the end of 2023 (2.8% expected in March).
China central bank follow or not
It is worth noting that many central banks have also implemented interest rate increases in recent months. According to the analysis of global central bank data by the British " Financial Times ", in the Federal Reserve Under the guidance of the government, this round of “global interest rate hikes” has reached a scale not seen in 20 years. Data shows that since this year, major central banks around the world have raised interest rates more than 60 times, the highest number since the beginning of 2000.
So will the central bank of my country raise interest rates next?
Source: The official website of the People's Bank of China
Reporters noticed that in May this year, the Federal Reserve announced that it would raise the target range of the federal funds rate by 50 basis points, but our country's central bank did not follow its lead in raising interest rates.
Since the beginning of this year, my country’s LPR interest rate quotations have been basically flat since the central bank of my country, but they declined in May. The 5-year LPR announced on May 20 was reduced by 15 basis points to 4.45% at one time, exceeding market expectations.
Oriental Jincheng believes that under the pressure of high inflation in the United States, the Federal Reserve is accelerating the tightening of monetary policy. Affected by this, U.S. bond yields have recently surged, the interest rate gap between China and the United States has widened, and the appreciation of the U.S. dollar has put certain depreciation pressure on the RMB. Therefore, under the tone of "we take the lead", my country's monetary policy will also pay more attention to internal and external balance at this stage and try to avoid "direct collision" between the two countries' monetary policies in the adjustment of policy interest rates.
At the same time, some insiders said that the central bank may not adjust the LPR quotation this month. First, the MLF interest rate, which is the basis for LPR pricing, has not changed; secondly, the 5-year LPR quotation in May has been reduced by 15 basis points, which is a large margin. The policy side will observe the stimulating effect of this targeted interest rate cut on the property market; at the same time, this It will also digest to a certain extent the impact of the recent reduction in bank liability-side costs.
What impact does A shares have?
Many brokerages and professionals believe that judging from recent trends, A shares may have gone out of the "independent market."
Huatai Securities research report pointed out that at the liquidity level, we need to beware of a decrease in the net inflow of northbound funds. In the early stage, due to the money-making effect and lack of confidence of A-shares, foreign active funds tended to flow out. However, the situation has improved slightly recently, and foreign active funds have turned to net inflows. Although the Chinese and American economies are dislocated and the United States has entered a quasi-stagflation cycle, the gradual improvement of China's economy is a trend. Internal macro liquidity is relatively abundant and financing needs are strong, which supports A-shares to emerge from an independent market.
Haitong Securities Xun Yugen and other analysts pointed out in a research report released on the evening of June 15 that historically, A-shares tended to fall simultaneously when U.S. stocks fell, but recently A-shares have "reverse" with U.S. stocks. This is due to the economic cycle and the stock market. Valuation positions are different. At present, the United States is still in a period of stagflation with declining economic growth momentum and high inflation. At the same time, it is also facing tightening pressure from the Federal Reserve in terms of policy. China is already in the late stages of recession with policies supporting the economy, so the macro environment of A-shares is better than that of U.S. stocks.
Qianhai Open Source Fund Chief Economist Yang Delong said that the Fed's interest rate hike balance sheet reduction is mainly in response to high inflation in the United States, and will not have a big impact on the A-share market . The U.S. stock market is at a historically high valuation, while the A-share market is It is near the bottom of historical valuation, and the two market positions are different. Driven by the surge in brokerage stocks in the past two days, the A-share index has further rebounded, and the market's upward trend has been further confirmed. This is a manifestation of the increased confidence in the A-share market and reflects that the A-share market has gradually changed from before April. The opportunity to build a position on the left side of has turned to the opportunity to build a position on the right side.
In fact, A-shares also ushered in a red opening on June 16. The three major A-share indexes opened slightly higher. The Shanghai Composite Index rose 0.04%, the Shenzhen Stock Exchange Component Index rose 0.07%, and the ChiNext Index rose 0.03%.
Xiaoxiang Morning News reporter Hao Yongqi
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