Inflation Misses Target, Lowers Rate Cut Odds; US Stocks Surge, Gold & Oil Plunge
The United States' inflation has failed to reach its target, and the Federal Reserve has announced a neutral interest rate expectation of 3%. A series of remarks have been released, making the ups and downs of the U.S. stock market unpredictable, and even gold and crude oil have followed the stock market's fluctuations.
For a while, the U.S. stock market has become a hot topic among investors. So, what exactly is this sudden series of remarks?
The United States' "face change."
Originally, the U.S. stock market was in a slump, and when the world thought the Federal Reserve would cut interest rates again to stimulate the economy, the Federal Reserve "changed its face" at this time. Not only did they not cut interest rates, but they also set the neutral interest rate expectation at 3%.
The United States' "face change" has not been warmly welcomed by investors. On the contrary, it has made the ups and downs of the U.S. stock market unpredictable, and even gold and crude oil have been affected.
As we all know, the Federal Reserve's decisions can have a significant impact on the global economy. Therefore, after they announced that they would set the neutral interest rate expectation at 3%, this means they are very worried about the inflation issue.
Because of this, many people have started to speculate about their next moves, and they believe that they are very likely to cut interest rates again in November.
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In addition, they are also planning to gradually reduce their balance sheet and are expected to reduce it to $2 trillion by 2023.
This series of measures is undoubtedly a strong signal to the global economic situation, as their decisions will directly affect the stability and development of the global financial market.
At the same time, their actions have also made people pay more attention to the future inflation risks and express their deep concerns about it.Ironically, following the United States' announcement of a neutral interest rate expectation of 3%, global stock markets have experienced a divergence in their performance. Among them, European stock markets have been generally lackluster, with indices such as the UK's FTSE and Germany's DAX experiencing declines to varying degrees. Despite this, amidst a time when bullish sentiment is gradually warming up, the A-share market has performed exceptionally well. Not only did all three major indices close with medium-sized positive gains, but the number of individual stocks that rose exceeded 4,600, and the trading volume reached an astonishing 876.6 billion.
This strong performance has given people hope for a market reversal and is expected to continue to rise in the future. As previously mentioned, the United States' "changing face" has undoubtedly brought many uncertainties to the global economic situation. This uncertainty is undoubtedly a severe challenge for the stock markets of other countries and regions. Nonetheless, in this moment filled with variables, we should also see some positive signs. For example, although the A-share market has been in a slump, it has shown remarkable strength in this market trend. Thanks to this, the A-share market not only rose against the trend in the short term but also gave people some optimistic expectations for the future.Of course, we cannot afford to be complacent about the current situation.
Because both the global stock market and economic conditions are filled with various uncertainties and challenges.
Therefore, we need to remain vigilant and make timely adjustments to cope with various situations that may arise in the future.
The underlying intention behind the Federal Reserve's "face change".
So, facing such a "face-changing" Federal Reserve decision, what is their deep meaning?
In fact, many complex factors are hidden behind it.
Especially in the current global economic situation, the risk of inflation is becoming more prominent.
Because of this, the Federal Reserve has to seek a balance between economic recovery and inflation risk.
Although they ultimately decided to set the neutral interest rate expectation at 3%, some observers believe that this decision cannot completely solve the inflation problem.
On the contrary, they believe that the Federal Reserve still needs to be cautious in dealing with inflation risks.But regardless, in the current global economic situation, the influence of decisions made by the United States, as the world's largest economy, is self-evident.
Precisely for this reason, other countries and regions need to closely monitor the United States' movements and make timely adjustments to adapt to various situations that may arise in the future.
Gold and crude oil are affected.
Sometimes people always feel that their own field is the "stormy waves," but in fact, it is not.
Take the stock market, for example; in his view, A-shares are the "big shots," but looking around, it's just like that.
As one of the world's largest stock markets, the NASDAQ 100 Index, which represents technology companies, has more than one-third of its companies' values far exceeding the highest market value of Moutai in the A-share market.
Let's talk about real estate. In China's view, housing prices are soaring, and it's a highly profitable industry.
But looking at it from another perspective, the market value of China's real estate industry can't even make it into the top five in the world.
So when the world is about to lower interest rates, and the Federal Reserve goes against the trend.
The whole world is moved.Especially the three most closely watched areas: U.S. stocks, gold, and crude oil.
In terms of U.S. stocks:
Although the Nasdaq 100 Index fluctuated and fell below the break-even point during the session, it was subsequently lifted by buying to rise by more than 0.5% during the session and return to a strong state.
The S&P 500 Index also led the way, rising by more than 0.7% during the session and returning to a strong state.
The Dow Jones Index, on the other hand, remained relatively stable, falling by about 0.1%.
It can be seen that: The three major U.S. stock indices all maintain a relatively strong state and are returning to an upward trend.
In terms of gold:
With the European Central Bank and the Federal Reserve issuing hawkish statements, gold prices experienced a phased correction, falling below $2550 per ounce to the $2535-2540 per ounce range.
However, it quickly rebounded to the $2545-2550 per ounce range and fluctuated within that range.
In terms of crude oil:The price of imported liquefied natural gas has risen from 93,000 yen per ton to 95,000 yen per ton.
This price level has set a new historical record.
The price of imported crude oil also fluctuated from $75.8 per barrel to around $77.2 per barrel.
It is clear that gold prices continue to rise amid increasing inflation concerns.
In conclusion,
The Federal Reserve's "change of face" will intensify inflationary pressures!
Although the decision may not be affected by market expectations, it could lead to increased market volatility.
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