Category Archives: News

crude oil retracement to 67.8

Yesterday, it went down once and finished high. The position of 68-68.1 was more than once, rose to 68.7, and finally, it fell to around 67.6. There was not much fluctuation and market, and the general direction was still bullish. Change, as long as 67 has not broken, then the idea of ​more operations will not change, today after the callback in the 67.8 position involved more than one single, continue to look up to the high point of rebound can b 69.

Gold rebounded Above 1320

the price of gold by the dollar impact of a substantial upside, continued to fall, yesterday, after a rally above 1326, has repeatedly been tested, finally ushered in a sustained decline in the stock market to drop eventually ending at 1315.
in the global recession of assets, gold will continue to be sought after in the future,

The U.S. dollar stands out versus other currencies

The USD stands out versus other currencies
  On Tuesday, the U.S. dollar index maintained a continuous upward trend. During today’s intraday it traded through an integer mark of 91 in one fell swoop. The highest mark in nearly 14 weeks. In just six trading days, the trend of the United States Index has completed a reversal of the trend from an unfavorable course. The underlying reason behind this is the shift in people’s attitude towards central banks raising interest rates.

When it comes to central banks, they can divide into two parts. One is the Fed, and the other is the central bank other than the Fed. This paper will use this as the main line to explain the reasons why people are expecting changes in interest rates and other factors affecting the US stock index. Factor.
  When it comes to central banks, they can divide into two parts. One is the Fed, and the other is the central bank other than the Fed. This paper will use this as the main line to explain the reasons why people are expecting changes in interest rates and other factors affecting the US stock index. Factor.

  American aspects

  Economic data boosted expectations for raising interest rates four times during the year

  Yesterday evening, the United States announced that the Markit manufacturing and service PMI for April was better than expected. Specifically, the initial value of manufacturing PMI was 56.5, the highest since September 2014; the initial rate of service PMI was 54.4 higher than the forecast and the last month’s final value.

  Besides, US home sales in March also saw the second consecutive month of growth, and a series of positive economic data undoubtedly played a role in fueling the US dollar index. The US dollar index rose nearly 0.59 %, The most significant single-day increase since April.

  When Observing the recent data, the U.S. retail sales data was significantly better than expected last week. The Beige Book mentioned that the U.S. economy remains healthy and is expected to continue to grow and that U.S. Fed officials are fully confident of strong economic growth. Exceeding expectations also expected. The robust US economic data is the first reason to support the recent strength of the US dollar index.

  The positive economic data undoubtedly boosted the market’s expectations of the Fed’s rate hike four times during the year. Earlier, the United States has added one interest rate in March this year. The current interest rate range is from 1.5% to 1.75%. During the year, the rate hike is four times, and the last range is from 2.25% to 2.5%. From the chart, we can see that there is only one short one. During the week, expectations for raising interest rates four times rose from 24.9% to 31.8%.

  U.S. Treasury yield close to 3% psychological level

  In addition to the expected change in the Federal Reserve’s rate hike, US Treasury yields are another factor supporting the US index. Judging from the data, the yield on the 10-year US Treasury bond also recorded a continuous rise and approached a crucial psychological threshold of 3%. The increase in US Treasury yields has forced it to continue to expand its bond yields with the eurozone. The difference between the yields of the Treasury bonds of the same period in Germany briefly touched the highest level in 29 years, and funds are usually borrowed from low-interest-raising currencies to purchase high-interest-rate investments. The currency to make interest rates, which makes the dollar further strengthened.

When it comes to central banks, they can divide into two parts. One is the Fed, and the other is the central bank other than the Fed. This paper will use this as the main line to explain the reasons why people are expecting changes in interest rates and other factors affecting the US stock index.
  CFTC short position run

  The chart below shows the CFTC USD position data as of the week of April 10th.

When it comes to central banks, they can divide into two parts. One is the Fed, and the other is the central bank other than the Fed. This paper will use this as the main line to explain the reasons why people are expecting changes in interest rates and other factors affecting the US stock index.
  From the previous data, it appears that speculative net short positions held by speculators increased by 620 contracts to 1,805 contracts, indicating that investors’ willingness to bearish on the dollar before two weeks warmed up. However, the recent skyrocketing trend of the US dollar has caused a short-run squeeze to stop the loss, which has aggravated the pattern of a stronger US dollar.

  U.S. internal political stability

  On the 23rd of the local time yesterday, the US Senate Foreign Relations Committee voted through the appointment of the State Secretary of Pompeo. Earlier, due to the congressman’s belief that Pompeo’s lack of experience in foreign affairs and his attitude towards international affairs such as North Korea’s nuclear and Iranian nuclear affairs were too drastic and conservative, he encountered greater resistance from members of the Democratic Party in the nomination and appointment of the Congress. Now, Pompeo’s appointment will be submitted to the Senate for a total vote, and no surprise, Pompeo will be passed in the Republican Senate majority. It is worth noting that as one of Trump ‘s most trusted advisors, he is undoubtedly a sure-hearted solution to the stability of the US political situation.

  Also, the turmoil of the “Russia gate” incident has also resolved, because recently the White House spokesman Saunders said that Trump has no intention to dismiss special prosecutor Miller.

  Global Central Banks


  On Friday European Central Bank President Mario Draghi said the euro growth area might have peaked. At the same time, it also shows the concern that trade protectionism has had some negative impact on global economic indicators. He also stressed that the current monetary policy still has uncertainty and needs patience.

  Draghi will hold a press conference this Thursday (April 26), according to its recent remarks will not announce the European Central Bank’s changes in QE policy. The Bloomberg survey also showed that only 36% of economists surveyed expected the European Central Bank to announce the end of QE in June, which is less than half of the survey conducted last month.

  Also, today at 16:00 Beijing time, it will be announced that the German IFO business climate index in April may not be as good as expected. As the economic locomotive of the eurozone, Germany’s economic impact on the entire eurozone is self-evident. And just this Monday (April 24th), the German Central Bank has made it clear that the slowdown in economic growth in the first quarter was due to unexpectedly weak manufacturing performance, so the future trend of the euro is still worrisome.

  Carney speaks through the British recession

  On Friday (April 20th), Governor Carney spoke, revealing three significant concerns about the Bank of England’s current interest rate hike. First, the recent British data made the Bank of England eye-catching. The inflation rate was only 2.5%, a record low. Although it can be attributed to the weather and the unique “soft-economy start” in the UK, at least inflation does not support the British short-term rate hike. The second is about the progress of Brexit. At present, “soft Brexit” and “hard Brexit” still have obvious differences within the parliament. The political uncertainty also makes monetary policy more cautious. Third, he also mentioned that “the market need not pay too much attention to the time point of interest rate increase,” implying that the probability of a recent rate hike has become smaller. Through the above three points, the Bank of England released a clear dovish signal.

  NAFTA negotiations are difficult

  At the beginning of last week, the US dollar against the Canadian dollar was still a process of continued weakness and low innovation. This was mainly based on people’s expectations that the preliminary North American Free Trade Agreement framework could be reached in May, which would benefit the Canadian dollar. However, Trump tweeted that the United States has linked Mexico’s border controls with the North American Free Trade Agreement and Mexico must prevent illegal immigrants from entering the United States. This, in turn, made the North American Free Trade Agreement casts a shadow.


  Before this, former Prime Minister Junichiro Koizumi stated that Abe might step down in June and Japan’s political situation had a problem. Once Abe stepped down to promote Abe’s economics, negative interest rate policies may cause uncertainty. This caused the yen ’s Weakness. Also, just yesterday Bank of Japan Governor Haruhiko Kuroda also stated that Japan must adhere to its strong easing policy and will not deliberately devalue the currency.

  International situation

  Judging from the overall international situation, the United States has eased its relations with various countries. As for the situation in the Middle East, Trump has made it clear that the United States will withdraw its troops from Syria as soon as possible, which proves that this Syrian incident has not sustained.

  In addition to the events in Syria, the situation in the Korean Peninsula has also eased. Kim Jong-un has said that North Korea has no nuclear weapons, and he is focused on economic reports to calm the situation.

  Russia, the United States Treasury Department said that if Russia Oleg Deripaska gives up Ross control Aluminum United Company, the US will ease sanctions; also, the United States has extended the deadline for companies Rusal and gradually stop the transaction, This means that this suspension of sanctions against RUSAL.

  Lastly, regarding Sino-U.S. trade relations, U.S. Finance Minister Mukuchin also said on Saturday that he is considering going to China to negotiate trade issues and is “cautiously optimistic” about the possibility of an agreement between the two countries in resolving the dispute in the future.

  Therefore, as a whole, the attitude of the Middle East, the situation on the Korean Peninsula, sanctions against Russia, and trade friction with China have all eased. This will create a robust environment for the rise of the U.S. dollar index.

  technical analysis


The Real Reason Behind the “Dollar Shortage”.

  Recently, the Libor-OIS spread has continued to expand, and the ” dollar shortage” has intensified.

  On Wednesday, Libor rose again by 0.38% to 2.3246%, setting a new high since November 2008. At the same time, recent consecutive rises also set the longest increase cycle since November 2005. The Libor-OIS spread widened to nearly 60 basis points.

  Matt King, a global debt strategist at Citi, points out that the real reason behind the spread widening is related to the overall shortage of funds in the US dollar and tightened financial conditions. The recent sharp decline in the bank’s credit default swaps (CDS) has also confirmed this. King further pointed out that the widening interest rate spread indicates that the Fed is in a predicament, and any further tightening may lead to the spread of the financial crisis and further cause a shortage of US dollars.

  The Libor-OIS spread is an important indicator of how easy it is to obtain money in the money market. It mainly reflects the credit pressure of the global banking system. If interest spreads widen, it usually means that the willingness to lend to banks is falling.

  King believes that one of the key signs is that the sharp changes in interest rates may not be technical at all, but rather the Federal Reserve’s by-products of tightening currency. The impact of this by-product is more structured and dangerous, which means that the Fed is in a difficult situation. Any further tightening may lead to the spread of the financial crisis and further cause a shortage of the US dollar.

  King said in an interview with CNBC:

  We can see that the relatively modest evacuation of the central bank has suddenly produced wider consequences than expected, which has indeed caused a larger scale of deflation, just as we have two extra-than-expected Fed rate hikes .

  However, the problems we have encountered so far are not systematic. We do not have to worry that the banking system will collapse as it did in 2008 or 2012. However, we also expect that the current pressure will increase. However, as the Fed continues to lose excess reserves, the situation may be even more tense.

  King believes that the depletion of the Fed’s excess reserves is the most important long-term driver of the US dollar shortage:

  The Fed is running out of reserves and now consumes 30 billion U.S. dollars every month, and then may increase to 40 billion U.S. dollars in the next quarter, and the pressure will steadily increase.

  So far, the tax reforms and the resulting changes in corporate finance have brought pressure. But the problem is that this situation will not disappear, and this is a structural change.

  King pointed out that when Libor-OIS spreads soared, the cost of debt hedging increased sharply and the cost of foreign investors buying US Treasuries and corporate bonds increased significantly:

  Last year, 80% of the net purchases of U.S. corporate bonds came from foreign investors and mutual funds. They have stopped buying in the past few months and the market has always hoped that they will be able to buy as before.

  However, if you are a Japanese investor, your cost of hedging will increase from 2.50% to 2.75%, and you know that with each time the Fed raises interest rates, costs will increase. Suddenly, U.S. bonds are less attractive. Under the conditions of low global market sentiment, it is hard to believe that U.S. bond markets will rebound.

  On March 20, King warned:

  Libor is still the reference benchmark interest rate for most leveraged loans, interest rate swap products, and some mortgages currently on the market. In addition to the direct impact on the aforementioned financial products, the higher money market interest rate (rising from rising Libor) and the weak performance of risk assets all contribute to the outflow of mutual funds.

  If the withdrawal of funds from mutual funds further exacerbates the selling of the market, the indirect negative impact of the wealth effect on the economy may even exceed the direct impact of rising market interest rates.

The UK Urged to Consider the “Norwegian Model” Instead Brexit

Brexit or the “Norwegian model” All you need to know is here

  The British Brexit Commission had a major intervention in the British Brexit debate last week as it urged Prime Minister Theresa May to consider the “Norwegian model” as an official alternative.

Britain urged to consider accepting the “Norwegian model”
  Labor sources by the Clinton expressed cross-party committee of the European Parliament off Benn (Hilary Benn) leadership, if Theresa May failed to reach 15 goals in European negotiations off, perhaps you should consider the Norwegian model as options.

  These tests include: Maintaining the Irish soft border; trade between the United Kingdom and the European Union continuing, without incurring new costs; fully joining several European institutions.

  The EU has ruled out many tests. The reason given is that if the United Kingdom does not stay in the EU single market and customs union, these goals cannot be achieved.

  Britain’s Brexit Minister David Davis had previously ruled out the so-called “Norwegian model.” Davis believes that in many cases, this model will lead to the worst results in September.

  However, the British government has made concessions on many Brexit positions. If Theresa May fails to achieve her goal of negotiation, Britain may be forced to reconsider the “Norwegian model” that was rejected.

  Here are some key questions about the “Norwegian model”:

  What is the “Norwegian model”?

  Norway is a member of the European Free Trade Association (EFTA) and the European Economic Area (EEA).

  EEA members have the right to enter the EU single market, but also have the obligation to pay dues and comply with the main EU laws . At the same time, immigrants are free to go in and out, but they are not subject to EU regulations on agriculture, fisheries, justice and family-related regulations. The members of the European Economic Area also include the EU’s current 28 member states, Liechtenstein and Iceland.

  EFTA’s aim is to achieve in the Union free trade area among member countries and the expansion of industrial agricultural products ( 000061 , stock it ) trade; ensure that trade between Member States carried out under conditions of fair competition; development and expansion of world trade and the gradual removal of trade barrier. Its main tasks are: to phase out the tariffs and other trade barriers of industrial products within member states in order to achieve “free trade”; to maintain tariffs on industrial products in other countries; to expand trade in agricultural products; not to seek any form of European political integration.

  EFTA consists of four countries: Norway, Liechtenstein, Iceland and Switzerland. The group trades with each other and has signed free trade agreements with non-EU countries such as Canada , Mexico, and other countries.

  EEA membership applies only to the EU or EFTA member states. Therefore, if the United Kingdom leaves the EU in accordance with the “Norwegian model”, the United Kingdom can leave the EU, join the EFTA, and then become the 31st member of the EEA.

  If the United Kingdom leaves the EU in accordance with the “Norwegian model”, what are the benefits?

  If the UK can join EFTA and EEA at the same time, it can continue to fully enter the EU without having to bear the tariff. This will include the service industry. The service industry currently accounts for about 80% of the UK economy.

  Most studies show that this will be the least destructive model in Brexit. The British government’s own impact assessment found that from an economic point of view, the “Norwegian model” will be the least destructive option.

  Although Britain will retain full single market access, it will not be forced to sign some of the EU’s more controversial options. For example, Britain will not be forced to join the EU’s Common Fisheries Policy. For a long time, this has been a worrying issue for Brexitians. In addition, the “Norwegian model” will also exempt the common agricultural policy.

  How to deal with the controversial issue of the European Court of Justice?

  The Brexit people eventually decided to abandon the EU Supreme Court’s jurisdiction over Britain. According to the “Norwegian model”, the European Court has no jurisdiction over the United Kingdom.

  What are the disadvantages of the “Norwegian model”?

  The “Norwegian model” clearly has its own advantages, but it is not without criticism.

  Although Britain will eventually get rid of the EU court, it will be forced to reach an agreement with the European Free Trade Union Court. For most Brexitians, this only represents another irresponsible behavior that interferes with overseas justice.

  If it becomes an EFTA/EEA country, the United Kingdom has problems with its influence. According to the “Norwegian model,” the United Kingdom will fully enter the single market, but the right to speak in formulating rules is much less than that of EU member states.

  Critics of the “Norwegian model” accuse this way of gaining benefits by sacrificing the right to speak. Norway has not formally participated in the EU’s decision-making, but it has incorporated about 75% of EU law into its national legislation.

  How to deal with immigration issues?

  Immigration is obviously the most concerned issue. The public’s desire to control immigration can be said to be the greatest motive for the British Brexit voters, and the British government vowed to end the free flow of EU citizens.

  EEA member states are required to accept the four principles of freedom, including the free movement of people. Obviously, this is a political risk for any government, so it is unlikely to be accepted.

  There is a way to solve the immigration problem, but it may not be realistic. Article 112 of the EEA agreement allows non-EU member states to opt out of the four principles of freedom when faced with severe economic, social or environmental pressures. For example, Liechtenstein had used Article 112 to control the free movement of people because of the fear that the size and resources of such a small country could cope with the large influx of people. However, the United Kingdom is unlikely to replicate this situation.

  What does the “Norwegian model” mean for the Irish border?

  Perhaps the most powerful reason to choose the “Norwegian model” for the implementation of Brexit is that it will solve the Irish border issue to some extent.

  By maintaining close contact with EU rules, the United Kingdom will avoid the non-tariff barriers on the Northern Ireland border.

  This is not a complete solution. In order to eliminate tariff barriers, Britain needs to join the current or new EU Customs Union after Brexit, but this point has not been included in the “Norwegian model.”

  The British government does not seem to have found a solution to avoid the hard border of Ireland. It is not surprising that if Teresa May and others begin to soften their attitude towards the issue.

UK Interest rates ‘likely to rise in May’ despite Brexit

 After the Bank of England’s (BOE) policymakers released a series of hawkish signals recently, it is expected that the central bank will raise interest rates in May, but Reuters surveys show that

  Most interviewed analysts believe that in the following year, the central bank will no longer have any further action. The reality in the UK has caused a hesitation in raising interest rates. In the major industrialized countries, the British economy has been trailing from the front runners and facing the most profound changes since World War II: Brexit.

  In fact, the latest Reuters survey revealed that analysts have not made any upward adjustments to the originally estimated inflation and growth. The current general opinion is that

  There is a 20% chance of Britain’s disorderly exit from the EU, but some analysts believe this possibility has increased over the past week. The analyst’s estimate range is 5-60%. The median estimate of the likelihood of an out-of-order exit from the EU reached a high of 30% in July and October last year.

  The survey was conducted during March 5-7 and all but one analyst expected the Brexit transition agreement to be reached. Almost all respondents believe that the UK and the EU negotiated a free trade agreement is the most likely outcome. But the second possibility is that no agreement is reached, then the United Kingdom and the European Union will conduct trade in accordance with the rules of the World Trade Organization (WTO).

  Staying within the EU market and canceling Brexit completely are the third and fourth possible options.

  More than 90% of the same group of respondents said prior to the referendum on June 23, 2016, that exit from the EU would hurt the British economy, triggering a decline in the pound and pushing up inflation. All these expectations have been fulfilled. At present, the Bank of England is still working to solve the problem of excessive inflation. At present, the UK’s inflation rate is 1 percentage point higher than the central bank’s 2% target. The central bank believes this is due to the lack of economic growth potential and the fact that the unemployment rate is at a historically low level.

  Barclays economists Sreekala Kochugovindan and Fabrice Montagne pointed out that “one of the main arguments in support of this statement is that demand shows signs of increase and supply has not seen an increase. Although our main forecast scenario is still August Interest rates, the risk of the central bank ignoring weak data and raising interest rates in May is not small.”

  The Bank of England’s interest rate hike in May is by no means a foregone conclusion.

  Among the 63 respondents, 36 (57%) expect to raise interest rates to 0.75% in May. This proportion is basically the same as in February. About 60% of respondents expect the UK index interest rate to come to 0.75% at the end of the year; one-third of respondents believe that by the end of 2019, the interest rate is 1.25%, and the second and fourth quarters each have a rate hike, though Fewer respondents are willing to predict so far. They predict that the inflation rate in the United Kingdom after one year is expected to fall from the current 3% to 2.2%, an average of 2.5% this year, and an average of 2.1% next year. This is consistent with the survey in mid-February.

  Alan Clarke, head of European fixed income strategy at Scotiabank of Canada, said he maintained his usual expectations of the Bank of England raising interest rates to 0.75% in May. Clarke pointed out, “However if consumer price inflation really slows down significantly in the coming months, we fully expect this interest rate increase to be questioned.” He predicts that inflation will fall to 2.5% by March before the Bank of England The estimate is 2.8%. “As long as core service inflation, which is domestic inflation, does not fall together, it is still possible to raise interest rates in May.”

  Another Reuters survey on Wednesday estimated that

  The pound against the dollar year after the expected rise to around $ 1.41, will formally withdraw from the British EU less than a month time, which shows currency strategist at UK and EU can achieve a smooth exit from the euro and the transitional agreement optimistic. However, since the biggest economic uncertainty currently lies in the political solution of Brexit in the UK, it is difficult to predict the future by using traditional economic models, analyzing the effect of base period, and estimating idle capacity.

  Some interviewees specifically mentioned that there is still a big gap between domestic political expectations and the conditions proposed by the EU. Germany Peter Dixon Commerzbank analyst said he expected the possibility of disorderly exit from the euro in Britain is 20%. “…if the Prime Minister Theresa May and the harder side of Europe are on the same front, then the possibility of an out-of-order escape from Europe will greatly increase.”

Should The Federal Reserve raise interest rates or Will it be harmful to economic recovery?

Should The Federal Reserve raise interest rates or Will it be harmful to economic recovery? 2018 interest rate hike
The Fed seems to be tightening its monetary policy recently: it began to gradually reduce the size of its $ 4.5 trillion balance sheet in October last year. At the same time, the market expects the United States to advance plans to raise interest rates gradually. From March 20 to March 21, the Fed will hold the next monetary policy meeting. The latest statement from the top decision makers shows that the number of interest rate hikes this year may reach four times – more than the three interest rate increases predicted in December.

However, the St. Louis Fed chairman and a few doves from the Federal Reserve Bank, James Bullard, said that if the Fed raises interest rates four times in 2018, it may lower inflation rates – especially when it cuts its asset holdings program. The bigger the time.Download APP Read more about this article
  However, the St. Louis Fed chairman and a few doves from the Fed top James Bullard said that if the Fed raises interest rates four times in 2018, it may reduce the inflation rate—especially when it cuts its asset holdings program. The bigger the time.

  In an interview with Brad UK he said in “Financial Times” interview, said: “In this environment, in fact, do not have to take this great restrictive policy stance, if excessive interest rates, then this will be applied to the inflation target below the level in A certain amount of downward pressure.”
  Support interest rate increase

  However, the Federal Open Market Committee’s stance on raising interest rates has become more and more hawkish, mainly because the non-farm economy performed well last month – the employment market increased by 313,000 workers.
  But Lee Brainard, the former U.S. Deputy Treasurer who was the leading dove of the Federal Open Market Committee, said last week:

  Progressive rate hike may be appropriate because “headwind factors US economic growth has been reversed for the wind factor” – the remark from new Federal Reserve Chairman.

  Also holding the view of raising interest rates is Boston Federal Reserve Chairman Eric Rosengren. On Friday (March 9th), Rosengren called for more than three increases in interest rates this year, adding that the annual core inflation has reached the Fed’s target for the last three months and six months.

  On Friday (March 9) the release of nonfarm data showed US employment in good condition, in the case of rising labor force participation rate, the unemployment rate was only 4.1%.

  The rate increase is limited

  The non-agricultural data shows that the salary growth in the United States has not declined and the average hourly wage rate has increased by 2.6%, but it is far weaker than the increase in January (2.8%).

  This has led some Fed’s doves to believe that the job market may be idle and affect the inflation outlook. Therefore, it is necessary to take a cautious approach to raising interest rates.

  But even if the Dovish faction admitted that the Fed may change, the U.S. Congress approved a $1.5 trillion tax cut in December, and in February Congress passed an agreement to raise the federal spending ceiling.

  The United States Minneapolis Federal Reserve Chairman Kashkari opposed the Federal Reserve’s interest rate hikes in December. On March 1st, he said he saw signs that inflation expectations are gradually rising. The reason was that he was influenced by consumer and business optimism. Kashkari emphasized that interest rate decision-makers should also consider the impact of fiscal policy.

  Brad said that he does not want any major impact of changes in fiscal policy, but he is willing to support the increase in interest rates in March, because it may boost the economy.

  Brad said that the so-called neutral interest rate – that is neither inhibiting nor promoting the economy – is still very low, so the room for raising interest rates without affecting inflation is very limited. He also doubted whether the Fed will be able to raise interest rates four times this year.

Fed Officials Are in favor of Raising Interest Rates

Fed officials are in favor of raising interest rates three times this year; the market may have underestimated the risk of rising oil prices
  A Federal Reserve official believes that the current employment situation in the United States, the Federal Reserve is expected to raise interest rates, the oil market may be due to insufficient oil prices, but the market may not how to care about this risk.

  United States Time 6 Tuesday, the Dallas Fed President, Robert Kaplan, interviewed CNBC declaring he favored raising interest rates three times this year; the action should not be too late. He believes that the United States is at or near full employment, and the jobless rate will fall to 3% this year. In such a situation, interest rates should be kept.

  Kaplan predicts that the oil market will maintain a “delicate balance” in the next few years but may experience rising oil prices due to under-supply. Because the supply of shale oil in the United States will fluctuate with fluctuations in oil prices, large-scale oil and gas projects by energy companies will see a decrease in massive investment in shale oil production while pushing up total U.S. oil production. This creates a risk of short supply. He believes the market may not have considered this risk too much.

  Last week Trump announced that it would impose tariffs on imported steel and aluminum products, which Kaplan said could give “some horrific impact” to the United States ‘ trade relations with Mexico and Canada. However, given the strong ties with these countries, The trade relations are in the interest of the United States, and he is optimistic about the real landing policy.

  Kaplan did not have FOMC voting rights this year, and his voting rights turn to him in 2020. Earlier on Wall Street, the Federal Reserve announced in December last year that it was expecting a bitmap of interest rates when most of the Fed officials expected a total rate hike of three times this year. But recently the market is increasingly expecting the Federal Reserve to raise interest rates four times this year.

  Last Tuesday the new Fed chairman Bao Weier in the House of Representatives testified, “is expected to raise interest rates further gradually,” the US economic outlook remains strong, market volatility will not stop the pace of rate hikes. The market is expected to raise interest rates four times; the 10-year U.S. Treasury yield returns 2.90%.

  Last Thursday, the Fed “number three” and New York Fed President Dudley mentioned the possibility of four rate hikes this year. “If we are to raise interest rates four times and add 25 basis points at a time, I believe it will still be gradual,” he said, pointing out that it would be half the level of the radical tightening of the Fed’s ten-year policy ten years ago.

  Powell’s attitude on the testimony of the Senator last Thursday was not as pronounced as Hawk last Tuesday. Wall Street anecdote mentioned later; the market has adequately predicted the possibility of raising interest rates three times, CME’s measurement tool shows that the federal funds rate futures market is expected to increase the probability of four times the rate of 30%.

The Fed chairman Claims there is no sign that the U.S. economy is overheating

  US Federal Reserve Chairman said there was no indication that the US economy is overheating,

  At a hearing attended by the U.S. Senate Banking Committee on the same day, Powell said there are still some weak factors in the U.S. employment market. For example, the labor force participation rate of “golden age” (aged between 25 and 54) is still below the pre-crisis level Evidence of rapid wage rise remains unclear.

  Powell said the continuing improvement in the job market will not lead to a rapid rise in inflation.

  At present, the unemployment rate in the United States has dropped to 4.1%, which is already at or below the level of full employment economists think. However, the inflation rate is only 1.7%, which is still below the 2% policy goal of the Federal Reserve.

  Powell stressed that the Federal Reserve will continue to raise interest rates gradually, to promote inflation to the target while ensuring that to avoid overheating the economy.

  Powell earlier testified before the House of Representatives that the U.S. fiscal policy has become more active and will stimulate economic growth. Strong overseas demand has provided effective support to the steady growth of U.S. exports.

  The current market is expected, given the strong economic outlook in the United States, the Fed may raise interest rates four times this year.

  According to reports, the New York Fed Governor Dudley said in Sao Paulo, Brazil, the rhythm of raising interest rates four times can still be considered as gradual. He said fiscal stimulus measures such as tax cuts and increased government budget spending will boost economic growth in the short term, thereby supporting the Fed to raise interest rates further.