[Looking at the world] US media： ＂Raising interest rates will push the US stock market to the cliff＂

　　China Daily Online, September 23rd This week, the gloom in the financial market became more and more intense.

　　The Federal Reserve announced on Wednesday that it would raise the target range of the federal funds rate by 75 basis points to between 3% and 3.25%. This is the highest level since the beginning of 2008, and it is also the third consecutive rate hike of 75 basis points this year.

　　Almost all Fed officials expect to raise interest rates to 4%-4.5% by the end of this year. Most Fed officials expect the unemployment rate to rise next year, which means that the risk of economic recession will increase.

　　At the same time, Deutsche Bank, the most pessimistic bank on Wall Street, also made a surprising point. Matt Luzzetti, chief American economist at Deutsche Bank, predicted that the Fed’s interest rate hike will end in the first quarter of 2023, when the interest rate will reach 4.9%. This means that interest rates need to be raised sharply at the policy meetings in November and December.

　　(Screenshot of the British Guardian website)

　　Jerome Powell, chairman of the Federal Reserve, said at a news conference after the announcement of the policy decision: "We must control inflation. I hope there is a painless way to do this. But it is not. "

　　The Guardian pointed out that at the annual meeting of central bank governors held in Jackson Hole, Wyoming last month, Powell admitted that economic difficulties were the price that the Fed was willing to pay to control inflation. "High inflation will bring higher interest rates, slower growth and weak labor market conditions, and it will also bring some pain to families and enterprises." .

　　(image source AP)

　　The Wall Street Journal said that the Fed’s current remarks are the most restrictive in decades. Investors, especially stock investors, may be too lightly.

　　Although the interest rate hike is fully in line with market expectations, the US stock market has taken a "crazy roller coaster". With the end of Powell’s speech, US stocks plunged across the board in late trading. At the close of the US stock market that day, the Nasdaq fell 1.79%, the S&P fell 1.71%, and the Dow fell 522. 45 points, down 1.7%, the lowest since June 17th, dragging down the global stock market. Nearly three-quarters of 2022 has passed, and the major American stock indexes are still in a deep trough. The S&P 500 index has fallen by 19% this year, and rising interest rates have eroded the high valuation enjoyed by the stock market for most of the epidemic period.

　　In this regard, the Wall Street Journal issued a document saying that "raising interest rates is pushing the US stock market to the cliff."

　　(Screenshot of the British Guardian website)

　　However, it is not just the stock market that slips into the abyss.

　　In terms of the labor market, Powell said that although the economic growth in the United States has slowed down, the relationship between supply and demand in the labor market is still quite tight; The job market continues to lack a balance between supply and demand.

　　The confidence of residential builders in the United States fell for the ninth consecutive month in September, falling to the lowest level since May 2020, which further shows that the slowdown of the housing market has not yet bottomed out. According to a lender survey released by Freddie Mac on Thursday, the average interest rate of 30-year fixed-rate mortgages climbed to 6.29%, which is the fifth consecutive week. A year ago, the mortgage interest rate was only 2.88%.

　　According to the forecast, the GDP growth of the United States will be only 0.2% in 2022 and 1.2% in 2023. By the end of 2022, the unemployment rate in the United States will reach 3.8% and will rise to 4.4% in 2023.

　　(Compile: Cao Yuanqing Tu Wei Li Haipeng)