In the early morning of the 5th Beijing time, the Federal Reserve announced a sharp interest rate increase of 50 basis points.
continuous release of hawk signal
Although the "boots" of the Federal Reserve raising interest rates by 50 basis points in may have landed, the statement of Federal Reserve Chairman Powell at the post meeting press conference still attracted the attention of the market. Will interest rates rise by 75 basis points in June? How to judge the current inflation and economic situation in the United States? The market urgently needs to find clues from Powell's statement.
The Federal Open Market Committee (FOMC) statement showed that despite a slight decline in overall economic activity in the first quarter, household spending and corporate fixed investment remained strong. With the appropriate tightening of monetary policy, inflation is expected to return to the target of 2% and the labor market will remain strong.
The Federal Reserve announced that it would gradually shrink its watch from June 1. Specifically, the initial size of the Fed's holdings of treasury bonds and MBS bonds is $30 billion and $17.5 billion respectively, and will gradually increase to $60 billion and $35 billion in three months.
Powell said that US inflation is too high and must be reduced to maintain a strong labor market. The FOMC is moving quickly to lower inflation and attaches great importance to the risk of inflation to the Fed's dual mission.
Powell said that FOMC believed that it was possible to raise interest rates by 50 basis points in the next few meetings, and did not actively consider the possibility of a single interest rate increase of 75 basis points.
In the early stage of the interest conference, many officials intensively "released the eagle" to set the tone. San Francisco Fed chairman Daley said the Fed may raise interest rates by 50 basis points at subsequent meetings. Chicago Fed chairman Evans, who has always been a "Dove", said that the Fed may raise the federal funds rate to between 2.25% and 2.5% before the end of the year, and then assess the economic situation. If inflation remains high at that time, it may need to raise interest rates further.
On March 17 this year, the Federal Reserve raised interest rates again after a lapse of three years and three months, raising the benchmark interest rate by 25 basis points to 0.25% to 0.50%.
On April 21 local time, Powell said that the Federal Reserve was expected to raise interest rates by 0.5 percentage points in May to curb inflation. He said that a similar interest rate increase might be needed thereafter.
On April 20, the "beige book" released by the Federal Reserve showed that in terms of prices, the inflationary pressure in various jurisdictions was still huge, the costs of raw materials, transportation and labor rose sharply, and the energy, financial services and Shenzhen Agricultural Products Group Co.Ltd(000061) prices in many jurisdictions soared after the escalation of the conflict between Russia and Ukraine. Most companies in their jurisdictions expect the US economy to continue to face inflationary pressures in the coming months.
will affect post holiday A-Shares
Under the expectation of the Fed's continued interest rate hike and "table contraction", it has also added a layer of variables to the market trend. Will the trend of A-Shares be affected after the festival? In addition, what is the next step for the RMB exchange rate to return to 6.6?
On May 3, Hong Kong stocks took the lead in opening the market. On that day, the Hang Seng index rebounded from a low opening and fluctuated the trading, rising slightly by 0.06% to 2110189 points. The market traded HK $106705 billion throughout the day, compared with HK $165116 billion the previous trading day. On May 4, Hong Kong stocks opened low and went low. The Hang Seng Index fell 1.1% to 2086952, with a transaction of 72.4 billion yuan.
Western Securities Co.Ltd(002673) believes that overseas, from the perspective of high-frequency data, U.S. consumption, real estate and labor force all show downward pressure. The risk of accelerating the decline of the U.S. economy in the second half of the year is rising significantly. In the future, the Fed will face greater pressure to further raise interest rates, and the overseas liquidity environment is expected to usher in phased repair. In China, with the orderly resumption of production and work in Shanghai after May Day, China's economy is expected to gradually return to normalization in the second quarter, which will also boost fundamental expectations. At the market level, the valuation of A-Shares has fallen sharply, and the whole has gradually entered the value range.
Western Securities Co.Ltd(002673) analysis: with the gradual convergence of the Fed's expectation of raising interest rates and the gradual implementation of the policy of easing the epidemic and superimposing steady growth to promote consumption, the rebound window of A-share market has been opened.
Macroeconomic researcher Wang Hao told the media that at present and for some time in the future, both A-Shares and Hong Kong shares may fluctuate due to the tightening of the monetary policy of the Federal Reserve, but the impact probability of A-Shares will be less than that of Hong Kong shares. A-share listed companies are all mainland enterprises, backed by a huge physical industrial structure and stronger ability to resist the impact.
Will the Fed's higher than expected interest rate hike and table contraction affect the trend of China's foreign exchange revenue and expenditure? Wang Chunying, deputy director of the State Administration of foreign exchange and spokesman, said that in recent years, China's foreign exchange market has been continuously strengthened and has the foundation and conditions to adapt to this round of Fed policy adjustment.
"From historical experience, the adjustment of the Fed's monetary policy, especially the increase of interest rates, usually has a spillover impact on cross-border capital flows of various countries. However, it is mainly some economies with weak fundamentals that have been greatly impacted." Wang Chunying said.
Since April 19, the RMB exchange rate has depreciated rapidly, falling below several levels in a row. In May, the data showed that on May 4, the offshore RMB exchange rate against the US dollar opened at 6.6480, with the lowest depreciation to 6.6591 and the highest appreciation to 6.6318 As of 16:05, the offshore RMB exchange rate against the US dollar was 6.6504.
The Northeast macro research report predicts that the RMB depreciation space may be limited. First, the US dollar index is expected to weaken gradually after the Federal Reserve intensively raises interest rates and shrinks the table; Second, China's epidemic is gradually coming to an end. With policy support, the economy is expected to improve gradually, and the economic growth is expected to pick up slightly in the second half of the year.
Yang Delong, chief economist of Qianhai open source fund, analyzed that the Fed's interest rate hike will indeed have a certain impact on the capital market, but considering that the market has fully expected the interest rate hike and has digested the market impact, it will not have a great impact on the A-share market. After the festival, the A-share market may continue the trend of shock rebound.
