Looking back on history, it is of reference significance to the three rounds of interest rate hikes and anti inflation period from 1972 to 1980 (1970s). Analyze the current situation and look forward to the future:
Fundamentals:
The US economic growth rate will gradually fall, and the growth driven structure will change: the service industry will be further repaired, and commodity consumption and residential investment will fall. The job market has improved significantly.
The fall of US inflation has encountered four major resistance factors:
1) in the post epidemic era, the demand for tourism, aviation and other services rebounded, driving the rise of oil prices and service prices;
2) the phenomenon of "inflation wage" boosting each other has emerged in the United States, and it is difficult to govern;
3) under the Russian Ukrainian war, Western sanctions against Russia exacerbated the tight supply of crude oil, natural gas and other resource products, and the relevant prices rose significantly;
4) under the policy differentiation of large countries, some stimulus policies boost the demand for bulk commodities and drive the price upward.
Policy aspects:
Monetary policy: the Federal Reserve is expected to raise interest rates by 25bp in March; This round of inflationary pressure is much higher than the Fed's expectation. In order to curb the rising inflation, the pace and intensity of the Fed's interest rate hike and table contraction will be significantly accelerated and increased. This round of interest rate hikes is more similar to the 1970s. Asset Outlook:
US debt: short-term hedging led to the decline of US debt interest rate; The subsequent inflation is high, the interest rate increase is gradually promoted, and the US bond interest rate is expected to return to the upward trend: in the second quarter of 2022, the US long-term interest rate is expected to rise to more than 2%; If the subsequent Fed policy interest rate rises to 2%, the long-term interest rate will continue to rise.
US dollar: the Russian Ukrainian war led to an increase in the demand for hedging against US dollars; In order to fight against higher than expected inflation, the interest rate hike will speed up and drive the US dollar stronger.
US stocks: "raising interest rates to fight inflation" on the one hand brings about a continuous decline in the growth rate of real demand, on the other hand, the nominal interest rate continues to rise, which is easy to lead to the double kill of "performance + valuation" and the decline of the stock market.
Gold: under the dark clouds of war, gold is the core hedging commodity; Before inflation fell significantly, high inflation kept the real interest rate of US bonds low and the value of gold allocation was high.
Risk tips: repeated outbreaks and unexpected macroeconomic fluctuations.
