On the whole, due to the coexistence of low unemployment rate and high inflation, the Federal Reserve has to accelerate the tightening of interest rates. Therefore, interest rate hikes and table contraction will occur in the second quarter. The real economy is in stagflation, and the marginal downward pressure on the economy will begin to appear in the second quarter, although we expect it to be not obvious.
The short-term interest rate is still at a low level. Due to the emergence of upside down, the long-term interest rate is expected to fall for future economic growth, which limits the space for further rise of long-term interest rate. Therefore, in the second quarter, the U.S. real economy is not sensitive to interest rate. Therefore, there is a driving force for the continued recovery of U.S. risk assets in the second quarter.
We judge that we are basically facing downward pressure from the US dollar, because we have obvious optimistic expectations for raising interest rates. In the state of stagflation, the second quarter may be the transition stage of the US economic transition. After the impact of geographical conflicts on the global economy is gradually passivated, it will return to the fundamentals.
