[Prize] Is it easy to go up and difficult to go down with US inflation? Will July be the last rate hike?

The July Federal Reserve interest rate decision is coming, is a 25 basis point rate hike a sure thing? Is the interest rate hike cycle about to come to an end? Should the current market be greedy or fearful?

With so much charm, are U.S. stocks causing numerous short sellers to bend over?

Since the beginning of this year, the technology stocks have been rising wildly, and the army of individual investors seems to be making a comeback. The bullish sentiment of U.S. retail investors towards the stock market has reached the highest level since 2021. Recently, the CNN Fear and Greed Index hit a new annual high of 83, reaching an extremely greedy level.

The U.S. stocks are so attractive, causing numerous short sellers to bow down.

At the end of March, Michael Burry, the prototype of the movie 'The Big Short,' admitted that he misjudged the market situation.

In June, Savita Subramanian, one of the most pessimistic analysts on Wall Street and Chief Strategic Analyst at BofA, stated that the bear market has officially ended.

Recently, Mike Wilson, Chief U.S. Stock Strategist at Morgan Stanley, couldn't hold on any longer. He admitted in a report to clients on Monday that his judgment was wrong.

Has the honeymoon period of rapid CPI decline ended? Is it easier to rise by 3 than to fall by 3 in terms of inflation?

To address 'high inflation,' the Federal Reserve has initiated the fastest 'rate hike' process in history. At the same time, the overall U.S. inflation has dropped from the high point of 9.1% last year to the latest 3% in June. Amid a wave of optimism, the Nasdaq continues to hit new highs for the year.

However, some analysts point out that the honeymoon period of rapid CPI decline, driven by a high base effect since July, has ended. The year-on-year CPI growth rate may rebound slightly from July, and further downward movement would require the manifestation of explicit U.S. recession pressures. The current core CPI at 4.8% in June is still significantly above the Federal Reserve's 2% target, and there are no signs of a sustained cooling in the labor market yet.

Will the 25bp rate hike in July be a sure thing? Will the rate hike in July be the last one?

As of July 25, CME's "Fed Watch" data shows that the probability of a rate hike of 25 basis points to the 5.25%-5.50% range has exceeded 98%, it seems that a 25bp rate hike is a foregone conclusion. But is the July rate hike the last one?

Former Federal Reserve Chairman Bernanke said last Thursday that the Fed is likely to raise rates in July, and July may be the last rate hike of this cycle.

Nick Timiraos, known as the "new Fed News Agency," wrote on Monday: The Fed is not yet ready to declare victory over inflation. Due to the uncertainty of inflation trends, it is difficult to predict the Fed's next move after Thursday's rate hike.

Let's now consider the following questions:

1. Some say, "Stocks rise on faith and fall on gravitational pull." Do you currently believe in faith or gravitational pull?

2. Has inflation in the United States "truly" cooled down? Will inflation rebound in the second half of the year?

3. If this round of rate hikes is confirmed to be over, what investment opportunities are there?

Please choose one of the above questions and discuss your viewpoints in the comment section.

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Event Time: Until 24:00 on July 30, 2023, Peking time.

Keywords: Inflation, Economic Growth, Recession, July Rate Hike

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