The dollar fell on Friday after Fed Chairman Jerome Powell took a moderately dovish stance in his speech last night, contrary to market expectations. He said the Fed may not need to raise interest rates as much given the tightening of credit conditions;
Powell's remarks suggested that a rate hike would be 'skipped' at the June meeting unless the data in the coming weeks was particularly problematic.
The market expects that there is an 82% chance that the Federal Reserve will keep interest rates unchanged until July.
The strong non-farm payrolls means that the US economy has not fallen into recession. The non-farm payrolls are the basis for Mr. Bao. Mr. Bao does lag behind in looking at the data, but the interest rate is too high. In the case of low GDP growth in the US (the latest release on April 27 was 1.1%, far below expectations), high interest rates are not a long-term solution. I think the Fed will cut interest rates by the end of the year or as early as the third quarter. Raising interest rates means raising interest rates and shrinking the balance sheet, while lowering interest rates means lowering interest rates and expanding the balance sheet. The Fed will release money to increase market liquidity.
Focus on the repayment of US debt. If Biden cannot repay, he will most likely move to the third world, which may end in war... This is a potential black swan.