Concerns about interest rate hikes rise, global equity funds see outflows of $15.5 billion in a week

For the week ending September 9, global equity funds had net outflows of $15.523 billion, compared to net inflows of $6.591 billion the previous week. Meanwhile, money market funds saw net inflows of $10.72 billion, and bond funds had net inflows of $8.95 billion.

Considering the Federal Reserve's meeting early this Thursday, I tend to believe that some funds are proactively reducing their equity positions to guard against the Fed's interest rate hikes and subsequent more hawkish policies.

The pressure from rising oil prices has already begun to affect the market's assessment of interest rates. Rising energy prices will first push up overall inflation, and may later influence the prices of goods and services through transportation and production costs. If the economy and employment can withstand this, and inflation remains stubbornly high, the Fed will have reason to maintain high interest rates or even raise rates again.

(Although my personal stance is that the Fed will not raise rates, that does not mean I am right)

For investors, it is very likely that concerns about the Fed's interest rate hikes have led to a reduction in holdings, which can also be seen in this week's bond fund inflows. Of the $8.95 billion net inflow, $6.65 billion flowed into short-term bond funds. Short-term bonds are relatively less sensitive to interest rate changes and are convenient for reallocation after maturity, aligning well with investors' needs to collect interest first and wait for meeting results.

Therefore, I believe this set of data reflects that some funds have already begun to manage risk ahead of the interest rate meeting. Moreover, even if there is no rate hike this time, if the dot plot is adjusted upwards or the Fed hints at potential rate hikes in October or December, the pressure on U.S. stocks and Bitcoin may not necessarily disappear.

Unless the rate hike meets expectations and the Fed's subsequent statements are relatively restrained, the market may take a breather after the news lands.

@Gate Crypto, U.S. stocks, Hong Kong stocks, Korean stocks, gold, CFD, one-stop trading for prediction markets

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