In the early morning of Thursday, September 22, Beijing time, the U.S. Federal Reserve announced that rate hike 75 basis points , raising the target range of the federal funds rate to between 3.00% and 3.25%.
This is the fifth rate hike of the Federal Reserve this year, and it is also the third consecutive hiatus4 hiatus4 hiatus75 basis points. At the same time, this is also the biggest continuous interest rate hike of the Federal Reserve since former chairman Paul Volker "violently" hikes to curb inflation in the 1980s.
As the Federal Reserve's interest rate hike was implemented, the rate hike was consistent with market expectations. US stock once rose straight and turned red. However, Federal Reserve Chairman Powell said at a press conference that in order to pull inflation back to 2% and remain stable, he will work to raise interest rates and keep interest rates high until inflation drops. In the last hour of the trading session, the US stock market opened and fell in full swing. In the end, all three major stock indexes fell sharply by more than 1.7%.
Affected by this, the three major U.S. stock indexes closed down collectively on the same day. As of the close, the Nasdaq index fell the most, taking the lead in diving from the high to , a sharp drop of 1.79%. The decline has once again expanded to 1.99% since the week.
On the market, nonferrous metals and airline sectors ranked the top in the decline, large technology stocks generally closed down, Amazon fell nearly 3%, Apple , Tesla , and Meta Platforms fell more than 2%.
Apple (AAPL, stock price of US$153.72, market value of US$2.5 trillion) market value evaporated overnight US$51.1 billion (about RMB 360.2 billion).
Tesla (TSLA, stock price of US$300.8, market value of US$942.55 billion) evaporated US$24.8 billion (174.8 billion yuan) overnight.
Economists are concerned about the risk of economic recession
economic forecast released by the Federal Reserve on the 21st believes that the U.S. inflation rate measured by personal consumption expenditure (PCE) will reach 5.4% in 2022 and drop to 2.8% in 2023. According to forecasts, the growth of GDP in the United States in 2022 will be only 0.2%, and 1.2% in 2023; by the end of 2022, the unemployment rate in the United States will reach 3.8%, and will rise to 4.4% in 2023.
According to CCTV News, Fed officials have previously said they are seeking a "soft landing" of the U.S. economy to curb inflation by slowing economic growth, but not triggering a recession. However, economists are increasingly worried that over time, the Fed's sharp interest rate hike will lead to sharp layoffs in US companies and rising unemployment rates, and a full-scale economic recession will break out at the end of this year or early next year. The Associated Press also commented in the report that radical interest rate hikes have increased the risk of the United States falling into a recession.
Anti-inflation is still the Federal Reserve's hard indicator
After the Federal Reserve's interest rate resolution, Federal Reserve Chairman Powell held a press conference on monetary policy . Powell said that the Federal Reserve firmly promises to lower U.S. inflation to 2%, and the Federal Reserve has many policy tools to restore price stability.
Powell said that the speed of interest rate hikes depends on future data and will slow down the rate hikes at some point. Regarding the current economy, Powell believes that economic growth may be stronger than predicted, which is a good thing, and FOMC believes that the trend growth rate is in the range of about 1.8%.
Powell said that many people in the Federal Reserve expect a cumulative interest rate hike of 100 basis points by the end of the year, and some people expect a cumulative interest rate hike of 125 basis points by the end of the year, , but the next rate hike will be 75 basis points or 50 basis points, there is no conclusion yet. He stressed that a considerable number of officials tend to raise rates only 100 basis points by the end of the year.In terms of the labor market, Powell said that although the US economic growth slows down, the supply and demand relationship in the labor market is still quite tight; the employment market continues to lack a balanced relationship in supply and demand.
Will the People's Bank of China take action?
The Federal Reserve raised interest rates by 75 basis points, will there be any action in the People's Bank of China? What impact will it have on the stock market?
central bank issued a statement on September 16 saying that it will continue to implement the prudent monetary policy of , and will not flood the market or overdraw the future. On the 15th, the central bank carried out 400 billion yuan of medium-term lending facilities (MLF) and 2 billion yuan of open market reverse repurchase operations, and the winning rate was the same as before.
Qianhai Open Source Fund Chief Economist Yang Delong believes that the primary goal of the People's Bank of China is to stabilize growth, but at the same time, it must also consider that RMB exchange rate is stable.
"If the monetary policy deviation between China and the United States is too large, it may affect the depreciation of the RMB, causing certain pressure. Therefore, the People's Bank of China will also have some concerns in terms of easing. Recently, the Central Bank of my country has lowered the one-year and five-year LPR interest rates, and at the same time lowered the fixed deposit rate of large banks , both in order to stabilize economic growth and achieve the goal of stabilizing growth, but the possibility of lowering the benchmark rate is not high." Yang Delong said.
And for A shares , yingda Securities Li Daxiao said that there is no need to panic.
"China's inflation control is good, and China's economic cycle is not synchronized with the United States, monetary policy is relatively loose, fiscal policy is relatively positive, policy space is huge, policy toolbox is rich, this provides strong support for the future Chinese stock market. The resilience characteristics of A-share market still exist. The decline of A-shares is expected to be relatively small, so it is recommended to deal with it calmly. " said Li Daxiao.
CICC also pointed out that if the factors affecting bulk supply do not change significantly in the short term, the price of commodities may not drop significantly, and the US rate hike balance sheet reduction may be difficult to slow down significantly in the short term. The US dollar may still be stronger, and the RMB exchange rate against the US dollar may also fluctuate at the current level in the short term.
In addition, according to Phoenix TV , at the Phoenix Bay Area Financial Forum held recently, landlord Ming, head of the Chinese director of UBS Global Financial Markets Department, said that the Federal Reserve's interest rate hikes are key points worth paying attention to in the entire financial market, including all kinds of capital markets around the world. If we look at the interest rate hike environment in each cycle of the United States, there is a high probability that there will be some pressure on emerging markets, including the Chinese market. Although we cannot be alone, , in a large cycle environment, Chinese asset classes, including , Hong Kong stocks, , can outperform the US stock market, which is our basic judgment.
Editor丨Zhang Lan Comprehensive Daily Economic News, 21st Century Business Herald, Beijing Business Daily (Reporter Fang Binnan Zhao Tianshu), Securities Times, Sina Weibo @Phoenix TV
Pictures丨Visual China, Tonghuashun screenshots, etc.
