On that day, the US ISM manufacturing PMI recorded 50.9 in September, lower than the expected 52.2 and the previous value of 52.8, the lowest since May 2020, and close to complete stagnation, mainly because manufacturing orders contracted for the third time in four months.

On Monday, assets suppressed by US Treasury yields "recovered" one after another because the market bets again on , Fed , will cut interest rates next year. Spot gold once again hit the $1,700 mark after nearly three weeks, and silver soared 9% during the day. The three major U.S. stock indexes rose sharply across the board. Stock markets in Japan, Australia and South Korea followed up on Tuesday.

market expectations are not for no reason. On that day, the US ISM manufacturing PMI recorded 50.9 in September, lower than the expected 52.2 and the previous value of 52.8, the lowest since May 2020. is close to completely stagnating , mainly because manufacturing orders contracted for the third time in four months. This reflects to a certain extent the effect of the Federal Reserve's tightening policy.

The fierceness of the Federal Reserve's interest rate hike has caused Ray Dalio, the founder of the world's largest hedge fund Bridgewater Associates, also changed his view on cash for more than two years. He no longer believes that "cash is garbage" and believes that the current short-term interest rate is reasonable.

However, as Fed Vice Chairman Brainard said last Friday, there are dual risks in hike rate policy. The recent turmoil in the financial market has caused more and more investment banks and institutions to issue warnings. On Monday, the UN Conference on Trade and Development (UNCTAD) called on the Federal Reserve and other central banks to stop hikes in order to avoid putting the economy into a long-term stagnation.

The Federal Reserve's interest rate cut is expected to make a comeback, and the U.S. Treasury yield plummeted

On Monday, the market once again bets on the Fed's interest rate cut next year. Analyst Tatiana dararie wrote:

"Traders have lowered expectations for the Fed's tightening policy and bets again that the Fed will cut interest rates as early as May 2023."

On the first trading day of October, a lot of bad news emerged in the market. Dari noted that 's disappointing ISM manufacturing data, weak credit markets and rumors about the credit Swiss crash increased the likelihood of the Fed's final turn in the turmoil.

The trend of US Treasury bonds is eye-catching. The 10-year Treasury bond yield fell 26 basis points for the first time this year, which is the second time in the past 10 years.

Market expectations for the final Fed interest rate fall. Bloomberg WIRP feature calculation now shows the terminal interest rate at 4.38%, last Friday at 4.52%, and the highest was 4.7% in the few days after the FOMC meeting last month. implicit interest rates began to decline in March , indicating that investors expect the economic slowdown will prompt Fed officials to change their policies.

silver price soared, returning to above $20, with a 9% surge in intraday, marking its biggest single-day gain since February 2021. Analysts point out that part of the rise in silver prices may be due to technical reasons . Returning to the integer mark always causes excitement in the precious metals market. Of course, this is a high volatility metal, and should not over-interpret short-term peaks . Oxford Economic Research Institute believes that silver is showing strong technical momentum after being in the oversold range most of this summer. In the next five years, 4%-6% of assets will be allocated to silver.

As the gold-silver ratio drops, gold is also rising, returning to around $1,700.

U.S. stock ’s three major stock indexes opened high and closed high, while S&P 500 index closed up 2.6%, the largest increase since July 27.

Although the rebound is long overdue and may continue, especially after the stock market experienced its first disastrous plunge since 2008 in September, Dari warned that "Investors' struggle with the Fed this year will have a hard time with good results. "

html Last Friday, Fed second-in-command and vice chairman Brainard admitted that the Fed faces the two risks of excessive interest rate hikes and too few interest rate hikes. She said that premature withdrawal of interest rate hikes should be avoided, but also warned that rapid rate hikes from global central banks may cause shock in financial markets.

But Dari believes that it is Mark Cabana, head of interest rate strategy at Bank of America . The warning that the Federal Reserve is about to defeat the Treasury market has scared the hawks. That said, while cautionary remarks may be added to the upcoming speech by Fed officials this week, it is difficult to see how far it is to deviate from the Fed's determination to curb inflation. This is especially true with the Fed's favored inflation indicator at its highest level in nearly 40 years.

On Monday, FOMC Permanent Voting Committee and New York Fed Chairman Williams said that inflation is still "too high", the Fed's work has not been completed, and the policy has not yet reached the level of limiting economic growth. The Fed's rapid rate hike is "very good" to the market. Williams expects inflation to fall to 3% next year; the U.S. GDP may be close to flat this year; by the end of 2023, the U.S. unemployment rate may rise to 4.5%.

Dalio : No longer thinks that "cash is garbage", short-term interest rates are currently the right one

Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, has changed his view on cash for more than two years. He no longer thinks that "cash is garbage".

Dalio posted on social platforms saying:

"With the existing interest rates and the Fed's balance sheet reduction, cash is now neutral - neither very good nor very bad transactions. In other words, the current short-term interest rates are probably appropriate."

Since the Fed launched an unprecedented large-scale easing stimulus during the epidemic, Dalio has always held the view that "cash is garbage". He repeatedly said that he would face more inflation in the future.

At the end of May this year, although the U.S. stock market has been ruthlessly sold out for several months, Dario pointed out at the time that there was still a large amount of bubbles that needed to be removed from the market before the balance was achieved. The bond situation is also not optimistic when the Fed tightens increasingly. When inflation seriously affects the actual returns, he suggested that investors should choose real estate, gold and other physical assets .

Dalio had obviously lacked confidence in the Fed's policies. He pessimistically predicted at the end of May that the Fed would not achieve a soft landing as expected, and last month issued a warning on the prospects of US stocks under the Fed's sharp interest rate hike.

Dalio believes that investors may still underestimate long-term inflation and expect inflation to remain around 4.5% to 5% over the next decade. And the Fed "just raising interest rates to around 4.5% can cause the U.S. stock market to fall 20% further." After the Fed's third consecutive rate hike by 75 basis points, Dalio warned that the U.S. economy is showing signs of a recession and is expected to worsen further in the next two years.

United Nations calls on the Federal Reserve and other central banks to change their monetary policy direction

United Nations Conference on Trade and Development (UNCTAD) warned on Monday that if the Federal Reserve and other central banks continue to raise interest rates, they may push the global economy into recession and then fall into long-term stagnation.

In its annual report, the agency noted that "any idea of ​​being able to lower prices by raising interest rates without triggering recession is a rash gambling ."

report said that central banks, including the Federal Reserve, would have a more serious impact on emerging economies whose private and public debt levels are already high and therefore a debt crisis is likely.

UNCTAD estimates that for every percentage point the Federal Reserve's key interest rate rises, economic output in other developed countries will decrease by 0.5% in the next three years, while economic output in poor countries will decrease by 0.8%. The Fed's interest rate hike this year is expected to reduce the economic output of poor countries by $360 billion in three years, and further tightening of policies will cause more damage.

UNCTAD Secretary-General Rebecca Greenspan said at a press conference held in Geneva :

"The current austerity path of central banks in developed economies is hurting vulnerable groups around the world, especially developing countries . We must change direction, otherwise the damage caused by may be more serious than the financial crisis in 2008 ."

When asked about the solution, she said that other methods should be considered to reduce inflation, such as imposing huge profit tax on enterprises, strengthening supervision to control commodity speculation, and striving to solve supply bottlenecks. " If you only want to use one tool to reduce inflation, the only possibility is to slow down the world economy and eventually fall into recession. ”

UNCTAD said that rather than raising interest rates, policy makers should pay more attention to measures to directly target price increases , including subsidizing the implementation of price caps by levying an unusually high profit earned by many energy companies. Raising interest rates is almost no help in alleviating energy and food shortages.

Overall, the UNCTAD lowered its global economic growth forecast for 2022 to 2.5% from 2.6% in March, and expected a 2.2% growth rate in 2023.

International Monetary Fund (IMF) also warned last month that some countries could fall into recession next year and lower their economic growth expectations.