Before the interest rate meeting, the probability of a rate hike in September has risen to over 90%, basically locked in from a probability standpoint. Next, it's not about whether the rate hike will be confirmed, but about the market dynamics after the rate hike is implemented.
Tomorrow night, a 25BP rate hike will be confirmed. After a slight drop, the US stock market and #Bitcoin rebound, showing a rebound trend after the negative news has landed. Next, attention will turn to Wash's speech.
Hawkish rate hikes, future rate hike expectations + bond market yield suppression + high oil prices + global rate hike resonance, risk markets further deleveraging, volatility declines.
Dovish rate hikes, future rate hike expectations weaken, risk markets rebound in the short term, but still need to face bond market yield rise suppression, bond market risks + high oil prices and high inflation expectations + liquidity constraints caused by narrowing US-Japan interest rate differentials.
So looking at it this way, overall optimism seems limited. Although uncertainty does not 100% represent risk, these risk factors will become pitfalls suppressing risk markets. Risk markets need to eliminate them one by one!
All uncertainties revolve around one core factor—high oil prices. If after the rate hike implementation there is still a triple kill scenario in stocks, bonds, and currencies, why wouldn't Trump TACO? #本周FOMC揭晓，加息能否落地？
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