This week's US CPI and PPI data for January were unexpectedly strong, causing the market to postpone the May rate cut expectations to June, and then from June to July.
But the extremes of the market do not stop there, there are even calls for a "rate hike", and there are more than one person.
The biggest call for a rate hike "came from former U.S. Treasury Secretary Summers. We will carefully analyze every time Summers remarks, since the Fed started its interest rate hike cycle in 2022, most of Summers's predictions have come true. This man is not very human, he was once a popular candidate for Fed chairman, and he also has a strong Wall Street background. It can be said that he understands both economics and politics.
Summers said persistent inflationary pressures in the latest data suggest that the Fed's next policy move is likely to be a rate hike rather than a cut.
In addition to this, some well-known investment banks have similar views.
Société Générale believes that if the U.S. economy re-accelerates, the Fed's next interest rate action is likely to be a rate hike rather than a cut. - What is lacking, according to Citi strategists, is traders hedging the risk of rate hikes soon after a very short period of rate cuts.
There are two major risk moments that follow:
· February 29thUS Core PCE Price Index for January (the Fed's preferred measure of inflation) – This data is likely to show that price pressures were firm in January. Because the PPI report shows that ***5% of portfolio management and investment advisory in January, this category will be included in the US core PCE price index for January.
· March 12thUS CPI for February - this report will give the market a more objective view of inflation. Because January inflation data tends to be the highest in a year, reflecting seasonal factors.
Every week, the market is left with more questions than answers: When will the first rate cut be? What happens on the first day of China's market opening? Is the U.S. going to turn on?
Today, we published our latest article, "A Week Misread by the World", in Global Market Strategy Issue 63: Precarious, with more insider and higher-class insights.
First, there are two major misreadings of this week that this will be where people will lose money in the future.
Second, our exclusive Fear & Greed Index (Weekly) has shown significant signals after this week, with the USD, S&P 500, NASDAQ, and ** taking a clear next step.