$Dow Jones Industrial Average (.DJI.US)$ $SSE Composite Index (000001.SH)$ $Hang Seng Index (800000.HK)$
Note: I am a researcher in 'Mesoeconomics'. I have been studying the Federal Reserve's policies and analyzing trends in the US stock market for a long time.
An important figure’s speech was misinterpreted by the market…
Carefully read Brad's speech twice, and you will find where the problem lies.
~ Although 'the market expects the probability of a significant rate hike to soar above 90%', which is a scary number, remember that the Fed has not yet spoken, so everything now is the market's wishful expectation.
After the madness on Thursday evening, it is time for us to calm down and analyze the issues.
As expectations of the Federal Reserve raising interest rates are soaring, what we urgently need to do now is – to find consensus expectations. The market tends to follow the direction of consensus expectations just before they emerge.
The first question: A 25 basis point or 50 basis point interest rate hike in March?
Still no conclusion.
Firstly, a 50 basis point rate hike in March itself won't harm the economy, but if the big move comes right at the beginning, then after the rate hike, the market will expect similar-sized hikes in future meetings, and such signals can harm the economy. Keeping the option of a 50 basis point rate hike as a deterrent would be more effective. For example, if you have one bullet in your gun and there are two enemies in front of you, would you fire the gun?
Secondly, before the meeting on March 17th, the February CPI and non-farm employment data will also be released. These two figures...