Summary: The Fed's continuous radical rate hike expects the outlook for US stocks to deteriorate

Xinhua News Agency, New York, September 21st: The Fed's continuous radical rate hike expects to worsen the prospects of US stocks

Xinhua News Agency reporter Liu Yan

The Federal Reserve announced on the 21st that it would raise 75 basis points again, and stated that it would continue to reduce holding government bonds and institutional bonds, and was committed to allowing the inflation rate to return to 2%of the target. The economic prediction data released by the Federal Reserve after the interest rate meeting showed that rate hikes will last until 2023, and the economic growth rate will slow down significantly. Market analysts believe that the Fed shows the determination to reduce the risk of economic recession to reduce inflation, and it is expected that the US stock market will continue to undergo pressure.

The trend of the New York stock market reflected the market expectations on the day: the three major stock indexes were narrowed in the morning after the early trading was high, and there was a shock in the afternoon and diving at the end. As of the closing, the Dow Jones Industrial Average has fallen by 522.45 points from the previous trading day, and closed at 30183.78 points, a decline of 1.70%. The 500 stock index of the S & P was reduced by 66.00 points, closing at 3789.93 points, a decline of 1.71%. The Nasdaq Composite Index fell 204.86 points, closing at 11220.19 points, a decline of 1.79%.

According to the Federal Reserve's economic prediction data, the Federal Reserve officials have a median prediction of Federal Fund interest rates at the end of this year by 4.4%, which is significantly higher than the June forecast of 3.4%; the medium value of Federal Fund interest rates at the end of next year is 4.6%.

The market expects that in order to reduce inflation, the Fed may not take into account the economic cost, the US economy is declining or inevitable, and the prospect of corporate profitability will inevitably deteriorate.

Mark Kasana, head of the US Bond Strategy of Bank of America Global Research, said that the "eagle" signal released by the Federal Reserve is surprising, strengthening the expectations of the Fed's determination to control the risk of economic recession to control inflation.

Ruida Dalio, the founder of the world's largest hedge fund bridge water fund, said in an interview with the media on the 21st that to successfully control inflation, the Fed must continue to increase interest rates significantly. The benchmark interest rate needs to be raised to about 4.5%, and stocks and bonds will continue to be sold.

The Global Research Department of the Bank of America predicts that the Fed will raise interest rates by 75 basis points in November, and will raise interest rates 50 basis points in December. In February and March next year, 25 basis points will be raised respectively. The Federal Reserve ’s interest rate interest rate interval will reach 4.75%to 5%, which is higher than the previous predicted 4%to 4.25%.

Affected by the Fed's continuous interest rate hike expectations, the US 2 -year Treasury yield exceeded 4.1%on the 21st, closed at 4.04%.

Jason Pladesman, chief investment officer of the private wealth of Grendmid Investment Company, said that in view of the continuous high and the Fed's attitude, the current stock market valuation premium seems unreasonable, and economic and corporate profits are facing substantial risks.

Lisa Sharlett, chief investment officer of Morgan Stanley Wealth Management Department, said that the process of fighting against inflation is far from over, and the duration of inflation pressure will exceed investor expectations and continue to form down pressure on the stock market.

[Editor in charge: Shi Ge]

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