At the Federal Reserve's interest rate meeting last Wednesday night, the results of interest rate decision were expected by the market, but Powell's speech after the meeting was really unexpected to most market analysts, and no one expected Powell's wording to turn "dovish" so quickly.
Originally, the market expected the conditions for the Fed to turn its wording to dovish to be roughly divided into three categories.
The first is that inflation has been completely suppressed. According to the Fed, CPI has returned to 2%; The second is that there are big problems in economic data, such as a sharp decline in non-farm data; The third is precautionary interest rate cut, that is, the Federal Reserve foresees certain factors, so it cuts interest rates ahead of time to prevent "accidents".
Of these three kinds of dovish transfer conditions, the first and second are not quite valid at present, and only the third kind of conditions is more suitable for the current reality, but it is also the most controversial.
After all, early dovish transfer really makes the market think. Is it a worry about the economic prospects or a "helping election" before the general election? These all need to be observed step by step in the future.
Market Opportunities under "Doves" Speech
In fact, when the Federal Reserve turns dovish, the way is to continue printing money. We have experienced this situation many times in the past.
For commodities, the future is a market that tends to be bullish. Although the fundamentals of commodities are different, the market with money flooding is always beneficial to price increase, so doves' remarks can be described as an important boost to market bulls, so those commodities or indexes that have fallen miserably are the focus of attention in the future, because if they fall thoroughly, the safety factor will be relatively high.
Crude oil is the focus of many commodities. After all, oil price is the king of inflation.
Will the Fed's re-easing boost inflation and drive oil price again? This is the focus of market funds. Although the short-term performance is not obvious, once the events match, it will not be difficult for oil prices to soar again. At present, the oil price is still near the game price of repo SPR of US $70. Obviously, as long as the United States intends to replenish its strategic oil reserves, there will be buying near US $70, so the oil price is not pessimistic in the long run. And technically, oil prices are still running on the 5-year long-term moving average, so it is unnecessary to be overly bearish.
Besides crude oil, another thing to observe is agricultural products.
After all, agricultural products have experienced a decline for more than one year.
Although the current price is not absolutely low, it is not outrageous. If we observe on an annual basis, next year may be the year when the bottom turns (the absolute inflection point may be in the second half of the year). If the prices of agricultural products continue to fall in the first half of the year, then everyone needs to pay attention and prepare for the layout, and the quadrennial weather cycle is coming soon.
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