Market sentiment suddenly became extremely tense. On August 26, Beijing time, Federal Reserve Chairman Powell gave a speech. Powell said that the inflation situation in the United States is still severe and the Federal Reserve must continue to raise interest rates. Powell even refuted the money market's pricing of interest rate cuts starting in the second half of 2023.
As soon as Powell finished speaking, market expectations for a 75 basis point interest rate hike in September this year instantly surged to around 60%. US stocks fell sharply in response. At the close of the day, the Nasdaq index plummeted 3.94%, the largest closing decline since June 16, 2022; the S&P 500 index plummeted 3.37%, the largest decline since June 13, 2022; The Dow Jones Industrial Index fell 3.03%, plummeting more than 1,000 points in a single day, the first time since May 18.
The U.S. dollar index rebounded rapidly and has stood above 108. The onshore RMB exchange rate against the U.S. dollar rose rapidly, breaking through the 6.87 mark. The offshore RMB exchange rate against the U.S. dollar broke through the 6.89 mark, and is close to breaking 7. From the perspective of financial market performance, China and the United States, the two top economies in the world, are facing relatively large bearish sentiments, which deserves market vigilance.
Judging from Powell's statement, the Federal Reserve believes that the importance of fighting inflation is greater than the importance of supporting economic growth. Powell said that although the Fed continues to raise interest rates, it will cause "some pain" to the economy, but based on inflation and labor market conditions, the Fed must continue to raise interest rates. Experts said Powell's speech showed that the Federal Reserve will continue to raise interest rates more aggressively and does not even have plans to cut interest rates.
In addition, on the one hand, it is raising interest rates, and on the other hand, the Federal Reserve continues quantitative tightening. Starting in September 2022, the scale of quantitative tightening will increase from US$47.5 billion per month to US$95 billion per month, and quantitative tightening will continue to be aggressive. Some experts said that this will increase the risks to the U.S. economy and capital market, with room for a 20-25% decline in the asset market.
Employment indicators, leading economic indicators, U.S. bond maturity spread indicators can intuitively predict whether the U.S. economy will be in recession. However, these indicators currently indicate that the U.S. economy will have a high risk of falling into recession next year, and may even fall into recession this year. decline.
The United States is the world's largest economy, and our country's trade surplus with the United States reaches hundreds of billions of dollars every year. In 2020, my country's trade surplus with the United States reached US$310.3 billion; in 2021, my country's trade surplus with the US reached US$355.3 billion; and in the first seven months of 2022, my country's trade surplus with the US has reached US$242.7 billion.
Once the U.S. economy falls into recession, it will inevitably lead to a rapid decline in U.S. market demand, causing export companies in many countries around the world to face a survival crisis. By then, a large number of products produced by domestic foreign trade factories may not be sold, a large number of relevant employees will lose their jobs, and the global economy will fall into recession.
It can be seen that if the Federal Reserve continues to "aggressively raise interest rates" in September, the impact will be huge, the domestic currency operation space will further narrow, and the RMB exchange rate against the US dollar will exceed 7, which is a high probability event. From a domestic perspective, the real estate industry, one of the pillars of the economy, continues to be sluggish. The land auction market in various places has been deserted. The past phenomenon of a large number of private real estate companies grabbing land at high premiums has disappeared. Various policies to stimulate real estate sales have emerged one after another.
In September 2022, the international financial market is facing the pressure of the Federal Reserve's interest rate hike and quantitative tightening. The country is facing a real estate downturn and a severe economic situation. Therefore, investors must increase their risk awareness. Cash is king. If the house is not a non-buyer, If not, just wait and see the global economic situation clearly after New Year's Day before taking action.. As for the stock market, it is undoubtedly more difficult to make money...
