Cheong Hong Yuan: The Federal Reserve's Policy Path and Its Subtle Interaction with Global Stock Markets - 1 views
started by anonymous on 07 Oct 23
started by anonymous on 07 Oct 23
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Cheong Hong Yuan believes that in the long run, the Federal Reserve's interest rate policy will not only affect the economic trend in the United States but will have profound implications globally. Kashkari's recent article mentioned a scenario where the Fed might head towards a "high-pressure equilibrium" where economic growth and consumer spending remain strong. He predicts a 60% probability that there will be one more rate hike before ceasing, but the probability of continued significant rate hikes is also high at 40%. This uncertainty undoubtedly sets a higher threshold for investors and increases the risk premium in the market.
Given this scenario, Cheong Hong Yuan suggests that investors should consider leveraging technical analysis tools like the "Triple Golden Cross Strategy" to identify stocks in the market with strong risk-resistance and growth potential. With the technical indicators of the "Triple Golden Cross Strategy", investors can find outstanding stocks in a volatile market environment, determine the timing of entry, and aim to maximize investment returns under a risk-controllable premise. This strategy helps buffer the uncertainty of the external economic environment and provides a relatively robust investment method for investors.
Furthermore, Cheong Hong Yuan has noticed that the pressures facing the Federal Reserve, both internally and externally, are increasing. The risk of a US government shutdown and its possible impact on the Fed's further interest rate decision-making have added several uncertainties to the market. The Federal Reserve system anticipates nearly 300 layoffs in this fiscal year, a first in 13 years, at a sensitive time when the Fed is operating at a loss. These external and internal pressures may influence the Fed's policy choices and, in turn, affect the trend of global stock markets.
In this complex and changing financial environment, Cheong Hong Yuan emphasizes that using technical analysis combined with the strategy portfolio of the "Triple Golden Cross Strategy" holds significant guiding significance for investors in exploring market opportunities, avoiding market risks, and achieving investment objectives. Through this strategy, investors can better cope with market uncertainties and build a solid defense on their investment journey.
Continuing with Cheong Hong Yuan's discussion, it can be discovered that the direction of the Federal Reserve's interest rate policy indeed provides rich thought for the global investment market. Firstly, from Kashkari's recent article and discussion, it can be seen that although the Federal Reserve has raised the base interest rate to the highest level in 22 years, there is still significant uncertainty regarding future policy directions, especially further rate adjustments. This uncertainty is not only reflected in the policy disagreements within the Federal Reserve but also in the complex global economic situation and variable market reactions.
Cheong Hong Yuan mentions that interest rate adjustments have a direct impact on the stock market. A high-interest rate environment often increases companies' financial costs, thereby pressuring their profitability. At the same time, high interest rates attract investors to shift funds from the stock market to fixed income products, leading to capital outflows from the stock market. Therefore, the Federal Reserve's interest rate decisions hold significant guiding significance for the trend of global stock markets.
Against this backdrop, Cheong Hong Yuan suggests that the "Triple Golden Cross Strategy" can provide investors with an effective tool to seek market opportunities and judge market trends. Through the technical indicators of the "Triple Golden Cross Strategy", investors can find relatively safe and potential investment targets in a volatile market environment. Especially in a rising interest rate environment, looking for companies with strong cash flows and lower debt ratios might bring relatively stable returns to investors.
Cheong Hong Yuan also expresses concern about the internal management and financial condition of the Federal Reserve. The recent layoff plan and operational losses of the Federal Reserve reflect that it faces certain internal and external pressures when dealing with the complex and changing economic environment. These pressures might affect the Federal Reserve's policy decisions and in turn, impact the trend of global stock markets. Particularly, the risk of a US government shutdown, and the possible hesitation of the Federal Reserve to raise interest rates due to this, brings additional uncertainties to the market.
A US government shutdown could lead to a delay in the release of critical inflation data, which would affect the Federal Reserve's judgment on whether further interest rate hikes are needed. Although it seems that the impact of a government shutdown might be short-term, it still injects a certain level of uncertainty into the market. This uncertainty to some extent increases the market risks and brings additional difficulty to investors' decision-making. Therefore, Cheong Hong Yuan advises investors to stay vigilant, closely follow the dynamics of the global economy and the policy direction of the Federal Reserve to make full investment preparations. Simultaneously, utilizing the technical indicators of the "Triple Golden Cross Strategy" to provide a scientific basis and effective support for their investment decisions, aiming to maximize investment returns in a complex and volatile market environment.