Capital Market Interpretation Of The Fed'S Rate Hike Is Equivalent To A Rate Cut.

After the Fed raised interest rates last week, the global market was in a carnival.

Not only many investors, but also Fed officials, may be surprised.

As many Federal Reserve officials are about to make a dense speech this week, analysts expect the hawkish speech to be the main theme.

Jan Hatzius, Goldman Sachs analyst, said in its previous research report that the Fed was expected to raise interest rates by 25 basis points, which was the same as previously released signals, but the market regarded it as a "pigeon boom" surprise.

This is not the Fed's response to the market at all. Yellen has lost control.

The Financial Conditions Index (FCI), which tracks changes in share prices, dollar yields, yields and credit spreads, has fallen to the third lowest level since 2000 after the financial crisis, which means that the interpretation of the interest rate in capital markets is equivalent to a rate cut.

Hatzius believes that the original intention of the resolution of the Fed's FOMC meeting is not to let.

The situation has been significantly relaxed. After all, the main purpose of raising interest rates is to tighten financial market conditions.

"It may not be a sudden tightening, but at least it will be realized gradually over time."

Hatzius expects that the Fed may begin revising market expectations for this "Pigeon" rate hike.

The same view also includes BMO Capital Markets analyst Ian Lyngen and Aaron Kohli, who wrote in the last Friday's Research Report:

Upcoming

Officials' intensive speech may convey hawk information.

There is no doubt that they will try to regulate the market's response to the latest decision on raising interest rates and control the financial market situation.

Compared with their previous actions, these officials may try to further tighten the financial market situation, which is the current capital market situation.

Among them, the most concern of Yellen's speech will start at 20 o'clock on Thursday in Beijing, and the Dudley with permanent voting rights will deliver speeches on 21 and 24 days respectively.

They will also have plenty of opportunities to do so.

This week, we will have at least 8 high-ranking Federal Reserve officials, including the chairman of the Federal Reserve, Yellen.

In addition, the Evans, which will speak on Tuesday, belongs to the doves, though it is expected to go further.

But may give a warning.

Among the Fed officials on Wednesday's performance, Mester and George were prudent hawks, and their speeches were economic subjects. Their speeches could reverse the impact of Evans on the US dollar.

Kaplan, who spoke on Friday, is also a more cautious hawk. He may still hold his own views in his speech.

Taking into account the relatively low US figures this week, Fed officials' speech or an important influence on the US dollar trend.

Kathy Lien, chief foreign exchange analyst at BK Asset Management (BK), wrote earlier that Federal Reserve officials might use the opportunity to speak to remind market interest rates to go up.

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