Earlier, the United States reported a 1.QoQ GDP growth of 11%, although it has dropped significantly compared with before, it has not shrunk after all, and it is still growing.
But compared with other countries, especially China, the United States is much inferior.
And now inflation in the United States is still at a high level, which makes it difficult to explain why GDP is so low
As a result, the U.S. adjusted its GDP for the first quarter to a quarter-on-quarter increase of 13%。
A slightly higher GDP growth rate will not help the Fed much, and the two major problems it is currently facing are still difficult to solve.
As we all know, the Great Economic Crisis of 2008 made the economic development of the United States very sluggish.
In order to stimulate economic growth, the United States began to implement a policy of "zero interest rate". This greatly reduces the cost of borrowing and invigorates the financial market.
But this time, it was difficult for the United States to transfer inflation to other countries, resulting in its own inflation reaching a 40-year high.
So, the Fed raised interest rates.
But the first problem facing the Fed now is that if it raises interest rates to control inflation, there is a high risk that it will completely destroy the growth momentum of the US economy.
This is because the main drivers of U.S. economic growth are technology-based companies, which are the most vulnerable to interest rate hikes.
U.S. technology companies still contribute a lot to the U.S. economy, and technology companies occupy an important position in the U.S. And the volatility of technology companies has a crucial impact on the stability of the entire financial market.
In this regard, the ** of some giant technology companies in the United States has always been highly concerned.
Since last year, U.S. technology companies have been sharply alarmed, and people are very worried about this fluctuation.
In fact, all this phenomenon is due to the Fed's continuous interest rate hikes. Under the policy of raising interest rates, both financial** and other industries will face some risks and challenges.
However, while recent data suggests that the Fed is likely to continue raising interest rates, tech stocks have been less affected.
The Nasdaq has risen by around 24% so far in 2023, while the Dow Jones Industrial Average has not risen much and has now been erased.
This is a strange phenomenon worth noting in the US stock market this year.
Yesterday the United States released the latest PCE price index, indicating that prices in the United States have re-emerged**, and inflation is far from being effectively suppressed, which also indicates that the Fed's pace of interest rate hikes is getting closer.
But I didn't expect that the Nasdaq index fell by 2 by a large margin last night2%。
This year, the Nasdaq** is 24% and the S&P 500** is close to 10%, but the Dow Jones Industrial Average remains marginal**.
The chip sector of U.S. stocks rose higher last night, with the Philadelphia Semiconductor Index** as high as 63%, a cumulative increase of more than 10% this week, and also created a new high in the past year.
At the same time, the performance of Chinese concept stocks is also very good, and the China Golden Dragon Index **29%, an increase higher than the Nasdaq index.
As Pinduoduo's financial data was far better than market expectations, with revenue growth of nearly 60%, Pinduoduo was 19% throughout the day, driving the overall growth of Chinese concept stocks.
But after careful analysis, the strangeness of last night** is that not only inflation exceeded expectations, but US Treasury bonds may go bankrupt at any time. In this case, is the U.S. stock market ushering in the last carnival?
This is another conundrum facing the Fed.
Because once the Fed raises interest rates, it will inevitably drive the yield of the entire bond market**, which means that investors who originally held U.S. bonds will be forced to continue to sell on a large scale, further suppressing the ** of U.S. bonds.
This creates a vicious cycle of constant selling.
However, the U.S. debt is still facing a ceiling crisis, isn't this adding fuel to the fire?
If you don't raise interest rates, you can't face inflation, and if you raise interest rates, you can't face U.S. bonds**.