China Daily Network September 28 Last week, the Federal Reserve raised interest rates for the third time in a row 275 basis points, raising the target range of the federal funds rate to 3%-3.25%, setting the largest intensive interest rate hike since 1981.
"Wall Street Journal " said that the U.S. Federal Reserve (abbreviated as: Federal Reserve) is like the reckless bull in porcelain shops. It is ready to use interest rate hikes to create damage to curb the worst inflation in the United States in 40 years.
As the rate hike boots landed, the Fed's statement highlighted the hawkish stance, and the market's pessimism was "about to break out."
The first one to bear the brunt is US stock . Last week, the total market value of the entire US stock market evaporated by more than US$2.8 trillion (approximately RMB 20 trillion). On Monday, September 26, Eastern Time, a "big dive" was staged during the session. The three major U.S. stock indexes fell for the fifth consecutive trading day, which means that all three major U.S. indexes fell into the bear market (the market believes that short-term losses exceed 20% will be a bear market).
US stocks have fallen sharply and violent inflation make it more difficult for them to be in a difficult situation
(Source: China Daily Cai Shi English "China Daily" September 15, 2022 Edition 8)
According to Dow Jones Market Data, since this year, the S&P 500 index has fallen by an average of 1.2% in the week after falling at least 1% in a single day. This is the biggest drop since 1931. According to data from Bespoke Investment Group, a research firm, research firm Bespoke Investment Group, the Russell 3000 large-cap stocks in the United States, fell 24% this year, with a market value evaporated by $13 trillion, and the prices of several once soaring stocks have fallen by more than 60% from their 52-week highs.
Some analysts believe that the current pessimism among U.S. stock investors has soared to the highest point since the global financial crisis in 2008.
The Washington Daily published an article titled "Buy on dips and get trapped, and US stock investors don't hit the wall and don't look back." The article stated, "This is the most severe Waterloo in the US stock buying strategy since the 1930s. After the decline, the US stock market did not rebound, but continued to fall, causing investors who entered the market to buy on dips and suffer heavy losses."
S&P fell nearly 23%, but the US dollar index rose 19%.
In order to solve the problem of high inflation in the United States, the Federal Reserve raised interest rates wildly, the US dollar appreciated rapidly, the US dollar index hit a new high in 20 years, and the intraday high rose to 114.69.
The United States harvests the world through the hegemony of the US dollar
(Source: China Daily Roger English "China Daily" 8th edition, September 16, 2022)
US dollars "rush to the top", causing the depreciation of 36 currencies in the world to at least one tenth, causing a large number of developing countries to be forced to swallow local currency depreciate , funds flee, rising financing and debt repayment costs, and economic recession caused by imported inflation. Countless families have become poor overnight, making the already weak world economy worse. This has wreaked havoc on a global scale.
In this regard, the Wall Street Journal pointed out that the appreciation of the US dollar has brought trouble to the global economy. The United States should adopt responsible economic and financial policies to play a constructive role in maintaining international financial stability and promoting the recovery of the world economy. World Bank should do more work on the US side in this regard.
Morgan Stanley Chief U.S. stock strategist Michael Wilson issued another pessimistic prediction, saying that the strength of the US dollar will always lead to financial or economic crisis in history, and the S&P 500 will fall 13% to 3,000-3,400 points.
(Translated by Cao Yuanqing, Cao Jing, Li Haipeng)
Source: China Daily Network
