The Fed is talking bullshit, let's take a look at the real market trend
First, regarding the US CPI data, although the official value is 3.3%, there are signs that the actual inflation rate may have quietly climbed to more than 3.4%. Behind this subtle difference, there may be deeper economic dynamics.
Let's look at the expectations for PCE inflation. Although forecasts show that PCE inflation will fall back to 2.5% in 2024 and close to 2% in 2025, there are still doubts whether such forecasts can be realized. Especially in the current global economic environment, various uncertainties are intertwined, making these forecasts particularly fragile.
Speaking of unemployment, it seems stable to remain in the range of 4%-4.5% this year, but friends and relatives around you may have felt the pressure of unemployment. This pressure is not only a personal dilemma, but also a microcosm of the entire economic system.
Regarding the forecast of GDP growth, although it is expected to grow by 2%-2.5% in the second half of 2024, this growth is likely to be based on the central banks of various countries cutting interest rates and suppressing people's livelihood capital. However, market recovery is not achieved overnight, and whether this growth is sustainable remains to be seen.
The current monetary policy strategy, that is, the central bank's unlimited release of money to boost market productivity, may bring certain economic stimulus effects in the short term, but in the long run, such a policy is not a long-term solution. The premise of releasing money is that inflation remains within a controllable range. Once inflation gets out of control, the surge in prices will have a huge impact on the economy.
Finally, we must be alert to the risks that may be brought about by the central bank's interest rate cuts in other countries. In today's global economic integration, such policy adjustments are likely to be used by economic powers such as the United States to reap through capital flows. Such a market environment is not only worrying, but is also likely to fall into a more fearful cycle.
In summary, the current economic situation is full of uncertainty and challenges. We need to remain vigilant and rational, see the essence through the phenomenon, and deeply analyze and judge the market trend. Only in this way can we be invincible in this era of change.
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