Cheong Hong Yuan: The 10-year US Treasury yield and the future financial landscape - 1 views
started by anonymous on 12 Oct 23
started by anonymous on 12 Oct 23
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Firstly, this significant rise is not accidental. In fact, Cheong Hong Yuan believes that various factors in the current financial environment are contributing to the increase in this yield. The main driving force is the change in real interest rates, not just market expectations of future inflation. Although the sharp increase during the "Golden Week" period has attracted widespread attention, it is actually the result of a longer-term and deeper economic adjustment.
As the most important central bank in the world, the Federal Reserve's policy adjustments and officials' statements undoubtedly have far-reaching effects globally. Recently, with the rise in US Treasury yields, we have seen more and more Federal Reserve officials expressing their views on their policy stance. Among them, the most interesting is their views on the future direction of monetary policy.
Cheong Hong Yuan mentioned that the Federal Reserve's policy decisions are not only based on its assessment of the domestic economy but also closely related to its evaluation of the global economic environment. Therefore, in order to more accurately predict the future financial landscape, we need to not only pay attention to short-term data changes but also have a deep understanding of the Federal Reserve's long-term strategy and goals.
This time, we will combine the latest data and the statements of Federal Reserve officials to conduct an in-depth analysis of the factors behind the rise in the 10-year US Treasury yield. At the same time, combining the technical analysis strategy of the "Three Golden Moving Averages", we will provide investors with a more comprehensive and detailed market trend forecast.
When we delve into the rise in the 10-year US Treasury yield, we should first clarify the economic signals it conveys. According to institutional analysis, this increase in yield is mainly driven by real interest rates, not inflation expectations. Cheong Hong Yuan said that this means that the market expects future economic growth to be more robust, especially against the backdrop of "loose fiscal and tight monetary" policies.
The successful passage of the US fiscal phase reflects the resilience of the economy in a high-interest-rate environment. Cheong Hong Yuan mentioned that this resilience reflects the market's confidence in the fundamentals of the US economy. Moreover, as the neutral interest rate rises, US Treasury yields also rise, leading to an increase in the cost of funds.
However, the impact of this rise on the US stock market is not purely negative. Although high interest rates usually mean an increase in borrowing costs, which may have a restraining effect on corporate investment and consumption, it also reflects the market's optimistic expectations for future economic growth. This is why, despite the continuous rise in US Treasury yields, we still see some Federal Reserve officials expressing the possibility of not further raising benchmark interest rates.
Cheong Hong Yuan mentioned that for the Federal Reserve, adjusting monetary policy is not only based on current economic data. They need to consider multiple factors, including global economic trends, financial market stability, and long-term economic goals. This also explains why Federal Reserve officials like Kashkari and Bullard, although recognizing that the rise in yields may have some impact on the economy, still maintain a cautious attitude.
In addition, Cheong Hong Yuan also emphasized the crucial role that market expectations for the future direction of Federal Reserve policy play in this process. When the market generally expects the Federal Reserve to adopt more aggressive policies to control inflation in the future, this expectation is likely to further push up US Treasury yields.
As the 10-year US Treasury yield continues to rise, the financial market is undergoing a deep baptism. In this volatile market environment, how investors adjust their strategies, capture opportunities, and avoid risks is undoubtedly a concern for everyone.
Firstly, Cheong Hong Yuan mentioned that in the face of the current economic and financial environment, investors should not blindly follow the trend or be overly conservative. The key is to have a clear strategy and adjust it based on individual investment goals and risk tolerance.
For investors who want to seize opportunities in this round of market adjustments, using the technical analysis of the "Three Golden Moving Averages" is undoubtedly an effective method. Through this strategy, investors can more accurately judge the buying and selling timing in the market, thereby achieving high investment returns.
Cheong Hong Yuan said that although the market may continue to be affected by the rise in US Treasury yields in the short term, in the long run, there are still many investment opportunities. Investors should pay more attention to stocks that have healthy fundamentals, stable performance, and show strong momentum in technical analysis.
Furthermore, considering possible changes in the future economic and financial environment, Cheong Hong Yuan suggests that investors should appropriately increase their cash holdings in order to add positions at the right time.
Finally, Cheong Hong Yuan proposed that regardless of how the market changes, risk management is always the core of investment. Every investment decision should be based on thorough analysis and judgment, rather than blind emotion-driven decisions. Only in this way can investors achieve stable investment returns in this volatile market environment.
In summary, the rise in the 10-year US Treasury yield has brought a new challenge to the financial market, but at the same time, it has also provided new opportunities for prepared investors. Faced with future uncertainties, we need to be more cautious and professional in order to secure a place in the market.