In the context of high inflation and economic hot, the Federal Council announced at the interest rate decision-making meeting in early May that the federal benchmark rate would remain unchanged in the range of 5.25~5.5%, and the interest rate would be frozen for six times.
Nick Timiraos, a reporter of the Wall Street Journal, known as the "Union Microphone", also pointed out in his latest article on the 23rd that the Federal Council concluded at the meeting that the Federal Council needed to maintain interest rates at the third consecutive disappointing inflation data last month. The current level will take longer than expected.
In this context, David Solomon, CEO of Goldman Sachs Group, also said at an event at Boston College on the 22nd that in view of the flexibility of the U.S. government's payment and investment in artificial intelligence infrastructure, the U.S. economy showed flexibility, and he expected that the Federal Council would not cut interest rates this year.
At present, I don't see any strong data to support the view that interest rates will be cut this year.
I expect that the Federal Council will cut interest rates this year at zero, and the investment in artificial intelligence infrastructure will help the economy better cope with the Federal Council's tight monetary policy.
Goldman Sachs report: Hedged funds reduce their holdings of U.S. stocks with rare strength
At the same time, the commodity department of Goldman Sachs Group also issued a report pointing out that last week (5/20~5/24) hedge funds were reducing their holdings of U.S. stocks with a rare effort, reversing the previous five consecutive weeks of net buying, which was the first occurrence since the beginning of January this year. In addition, the sale also includes the following points:
Index funds, ETFs and individual stocks have all suffered net capital outflows. Macro products such as index funds and ETFs have been sold for the first time in 6 weeks, and individual stocks have been sold for 3 consecutive weeks, setting the largest nominal net outflow scale so far this year.
The sell-off campaign spread to 11 industries in the United States, of which the industrial, information technology and real estate industries fell the most. It is worth mentioning that the cyclical industry has created the largest nominal net sale since December last year.
The industry was most seriously affected, with a net outflow of funds recorded for 11 consecutive trading days. Sub-industrys such as machinery, ground transportation, professional services and airlines have reached the highest net sales in the past two weeks.
The report also points out that the recent signs of economic recovery and the Federal Council's maintenance of hawks policy stance indicate that the environment may remain at high interest rates for a long time, and the sell-off is the response of investors.