[In a dilemma, how does Walsh balance inflation and market trends] Today's highlights
NO.1 Walsh's inclination
NO.1 Today's US stocks response to interest rate hike expectations
What is an interest rate hike?
An interest rate hike means higher deposit interest rates, leading everyone to put their money in the bank, which negatively affects investments and stocks.
But does the wise king think this way? No to inflation, no to interest rate hikes.
From a normal perspective, let’s analyze this matter. First of all, inflation definitely needs to be suppressed, which must rely on the negotiations of the US-Iran war; first talk about peace, then talk about development.
Walsh's plan: Maintain the status quo in June, July, and August, movements cannot be large, expect a 25bp hike in December, followed by aggressive balance sheet reduction, and then a rate cut in 2027, while US one-year fixed deposits rise to 4.3%-4.5%
[In summary]
· The root cause of difficult inflation suppression lies in the Middle East: US-Iran negotiations are not smooth, high oil prices, inflation is prone to rebound, and interest rate hike expectations are hard to diminish.
· Walsh's "soft hawk" approach: Not raising interest rates in the short term gives the market a "buffer," but balance sheet reduction + year-end rate hike is the hard card, high interest rates will become the norm.
· The style of US stocks has completely switched: from "AI growth" to value, high dividends, energy, and finance, growth stocks still face correction pressure.
· Key observation points:
1️⃣ June FOMC: Walsh's first appearance, is the wording hawkish or dovish?
2️⃣ Middle East situation: Whether it eases will determine oil prices and inflation;
3️⃣ December: Will there truly be a 25bp rate hike, starting the "rate hike + balance sheet reduction" dual tightening cycle.
Bitcoin looks for support at the 76000-75500 level.
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