To The Moon

Early this morning, the results of the Federal Reserve meeting were released. The result was that the interest rate increase of three yards was in line with the market expectations. At present, the benchmark interest rate reached 3.75% to 4.00%. I think Powell deserves to be a master of expected management. First of all, let the market think that it would be Pivot. At the press conference, he revealed in advance that it might slow down the pace of interest rate hikes in the future. This was the first time that the Fed was thinking about slowing down the pace of interest rate hike. After the market heard that the four major indices of U.S. stocks broke through, and $Dow Jones Industrial Average.US once exceeded 33,000. But next, Powell stressed that next year's end interest rate will be higher than expected, until the annual growth rate of long-term inflation drops to 2.0%. The result was amazing. This statement made U.S. stocks start smashing the market and then turn red and fall, especially the 3.36% decline of the Nasdaq index. Although Powell hinted that the increase in interest rates in December would be 50 BP, although the range was small, the market expected that next year would increase more than expected because of Powell's remarks, that is, although the Fed plans to slow down the pace of raising interest rates, it will pull interest rates longer and higher, and the market will experience longer. The interest rate increase cycle. I think this is the reason for the decline of U.S. stocks. I think the FOMC interest rate futures expects that the terminal interest rate may reach 5.00% to 5.25% next year, and may even be higher. At present, the 2-year interest rate of U.S. bonds is still at 4.6% and has not been adjusted to the futures level. It will take some time for the global financial market to adapt to the new benchmark interest rate, and there will be large fluctuations in the short term. In fact, the results of this Fed meeting were neither surprised nor frightened to me, because I had my own ideas earlier and also wrote in other articles. I always thought that the Federal Reserve would not Pivot too early, because it would release the wrong information to the market and then affect the work of the Federal Reserve. At present, the Federal Reserve seems to be "Pivot", but Pivot has become more hawks. The following is the focus of Powell's speech: Interest rate policy: At some point, it will be appropriate to slow down the rate hike. We may discuss reducing the interest rate increase in December. Powell: It seems too hasty to consider suspending the interest rate increase now. The Federal Reserve also needs to raise interest rates until the goal is achieved. The terminal interest rate level will be higher than the previously estimated interest rate. Inflation: Inflation is still significantly higher than the longer-term target of 2%. Long-term inflation expectations seem to maintain a good anchoring state. Labour market: The growth rate of the employed population is stable, and the growth rate of wages is still high. The labor market continues to be unbalanced. U.S. recession risk: The U.S. economy still has a chance to land softly, but the window is narrowing. No one knows whether the U.S. economy will decline, and no one knows how deep the recession will be. Energy/food: The Federal Reserve's policy tools well address the needs in the economy. But it does not directly affect food prices and energy prices. Spillover effect: The global economy is obviously at a difficult time. A strong dollar poses a challenge to some countries. We will consider many global issues into account in the Federal Reserve model. If the Federal Reserve fails to fight inflation, the global situation will not become better. The unemployment rate is still relatively low-end, and PCE is still relatively sticky and difficult to come down. Market analysts also predict that the Federal Reserve will not cut interest rates in 2023, and the overall terminal interest rate curve will pull up and remain high-end for a longer time. Basically, I think the Federal Reserve seems to have learned the lessons of the 1970s. They know that if the market feels that it will turn or even cut interest rates too early, then inflation will rekindle. Coupled with the current economic data of the United States, it is actually relatively sticky, and the labor market is still still tight. The growth rate of capital is still strong. Although the growth rate has slowed down, the latest GDP will also lead to growth due to the growth of net energy exports. Powell said that there is still a chance to make a soft landing in the U.S. economy. I don't agree. I think it's a means to appease the market. I think it's really appropriate to make a soft landing like the chart below against the background of unprecedented sharp interest rates. This so-called "soft landing" is ultimately It will cause harm, so haven't any other countries tried to ask the Federal Reserve to stop raising interest rates through the IMF or the United Nations before? This is because the Federal Reserve's interest rate hike has hurt other countries, but I don't think it's within the scope of the Federal Reserve's thinking, because there is a saying that "Our dollar, your problem". The Federal Reserve will only focus on domestic decision-making. As for things outside the United States, it is not within the scope of the Federal Reserve's work. @Daily_Discussion@TigerStars@Tiger_chat$SQQQ(SQQQ)$