Is the interest rate hike policy sustainable? How many more interest rate hikes will there be in the remaining time?
Since February 20 15, the Fed has raised interest rates seven times. As for how many times the central bank will raise interest rates in the rest of this year, the market has different views before.
Bank of America Merrill Lynch predicts that the Fed will still raise interest rates four times this year and three times in 20 19. The reason is that the US economy is growing steadily, the unemployment rate is at a low level, and the financial market is still loose, which means that the US economy can withstand "faster interest rate hikes".
Morgan Stanley believes that the next rate hike may be in September, and then suspended in 65438+February. At the same time, ABN· Amro and Morgan Stanley hold the same view. Although Barclays Bank maintains the expectation that the Federal Reserve will raise interest rates three times this year, it also implies that the risk of raising interest rates to four times will rise.
According to the data of FedWatch tool of Shang Zhi Research Institute, the probability that the market predicts that it will raise interest rates for the fourth time this year in 65438+February has risen to 52.4%, which is higher than 40.4% before the Fed raised interest rates.
Impact on China's interest rate policy;
With the gradual tightening of the Federal Reserve's monetary policy, the next monetary operation of the Bank of China also attracts people's attention.
Looking back, after the Federal Reserve announced interest rate hikes in March 20 17, February 20 18 and March 20 18, the Bank of China subsequently raised the open market operating interest rate accordingly. Therefore, it is widely expected that the Bank of China may follow up to adjust the open market operating interest rate.
He, chief economist of Industrial Bank, Hua Fu Securities and researcher of Industrial Research Company, said that the Bank of China will still raise interest rates in June with a high probability, but the impact on market interest rates may be limited. We need to pay attention to the impact of financial market fluctuations on specific policies. It is expected that RRR reduction operation will continue in China during the year, and MLF operation will continue.
Wen Bin, chief researcher of China Minsheng Bank, also believes that China Bank will make a choice according to the internal and external economic environment, and it is very likely that the operating interest rates of reverse repurchase and MLF will be slightly raised simultaneously.
However, he added: "But it will also lead to a further increase in the cost of capital for financial institutions to obtain liquidity through MLF. Therefore, there is still room and necessity for RRR reduction in the second half of the year. From the specific operation point of view, replacing MLF with targeted cuts to required reserve ratios or being the best policy option can not only maintain the stable and neutral tone of monetary policy, but also not add new base currency to the market. "
Regarding the impact of the Fed's interest rate hike on China, Sun Binbin, chief analyst of TF Securities's fixed income, pointed out that under the framework of structural deleveraging and strict supervision and currency stabilization, the overall liquidity attitude of the Bank of China is "steady", and the impact of the interest rate hike in June should also be under control.
What is the impact of this interest rate hike on domestic funds?
Entering the middle of the year, the trend of domestic funds has attracted much attention. Historically, the contradiction between supply and demand of liquidity is often prominent in the middle of the year, and the money market is prone to large fluctuations. The most typical example is 20 13. From 2065438 to June 2003, the representative 7-day repo rate R007 in the inter-bank market rose to 1 1.62%, a record high. In addition, in June of 20 1 1, R007 rose to 9.04%, the third highest value in history. With these impressive records, it is not surprising that liquidity has been concerned at the end of the half year.
The impact of the Fed's first interest rate hike in March this year has just passed, and the subsequent meeting on interest rates has started again. Since the Federal Reserve raised interest rates last time, the liquidity of the domestic market has been slightly tightened, and the central bank's open market operation as a whole has shown a net withdrawal of funds. Wind data shows that since March 22, the central bank has realized a net return of 2810.50 billion yuan through reverse repurchase, MLF, and fixed deposit of treasury cash.
1), reverse repurchase
Wind data shows that since March 22, the central bank has carried out 52 reverse repurchase operations, which are 7 days, 14 days and 28 days respectively, with a total investment of 3.03 trillion yuan; In the same time period, the number of maturities was more, reaching 59 times, with 3.09 trillion yuan of returned funds and 60 billion yuan of net returned funds. As the most frequent open market operation of the central bank, reverse repurchase has remained stable and slightly tightened in recent March.
As shown in the figure below:
2) Multilateral Fund
MLF operation is mainly based on 1 year, which can better meet the medium and long-term liquidity needs of financial institutions. Although the number of times the central bank operates through MLF in the past three months is not much, basically once a month, the overall scale is not small. Wind data shows that the central bank invested a total of 986.5 billion yuan through MLF operation, and returned 654.38+0.258 billion yuan at maturity, with a substantial net return of 2,765.438+0.50 billion yuan, which reduced market liquidity. Table below:
3) Cash deposit in the national treasury
Treasury cash deposit, the balance of treasury cash deposited in commercial banks. In the past three months, the central bank has done less open market operations, only 250 billion yuan, with a net investment of 50 billion and 200 billion yuan due. This is also the only one of the three operating tools to achieve a small net investment of funds and supplement a little liquidity.
According to the industry, although the market is worried about mid-year liquidity, the repair of liquidity expectations should not be overkill. Recently, the central bank released liquidity through "MLF expanding collateral scope +MLF excess continuation" and maintained a neutral and loose attitude. Under the guidance of this policy, the intention of the central bank to keep liquidity running smoothly has not changed, and it is unlikely that liquidity will be tightened in the middle of the year. Although the short-term RRR cut is expected to fail, the central bank's intention to maintain liquidity has not changed. Considering that nearly 70% of the cross-season certificates of deposit have been issued, the issuance interest rate shows signs of falling. It is expected that the overall liquidity will be better than expected in the middle of the year, and the cross-season funds will remain stable.
Counselor of the Central Bank: In the long run, there is no need for China to follow the Fed in raising interest rates.
The Federal Reserve raised interest rates as scheduled. This time, the central bank's monetary operation attracted the attention of the market. According to institutional analysis, due to full market expectation and obvious spread between market interest rate and policy interest rate, it is expected that the increase of open market operating interest rate will be relatively calm.
The Bank of China's "interest rate hike" has two meanings: one is to raise the benchmark interest rate for deposits and loans; The second refers to the operating interest rate of monetary policy tools represented by reverse repurchase and MLF. Recently, the central bank raised the operating interest rate of monetary policy tools. Since 20 16, the central bank has not followed up, except that the federal reserve raised interest rates in June 20 17. After the Federal Reserve raised the target interest rate of the federal funds, the central bank subsequently raised the policy interest rates represented by OMO and MLF. After the Federal Reserve announced a rate hike on March 22nd, the central bank conducted a reverse repurchase operation of RMB 654.38+0 billion by way of interest rate bidding, and the winning bid rate rose slightly by 5 basis points to 2.55%. In addition, the standing loan facility also raised interest rates slightly.
Ming Ming, chief analyst of fixed income of CITIC Securities, said that whether to raise interest rates needs to weigh the current internal and external factors. "The spread between China and the United States and the RMB exchange rate are external factors, which have a certain impact on whether the Bank of China raises interest rates. However, domestic economic fundamentals are facing some downward pressure. Expanding domestic demand and reducing the financing cost of enterprises have become the main goals of economic and financial work. The internal environment restricts the tightening of monetary policy and the pressure to raise interest rates is high. " He further pointed out that the central bank may "raise interest rates" by 5BP, combine with MLF and other open market operations to provide liquidity, and "raise interest rates" according to the domestic economic situation.
Sheng Songcheng, counselor of China Bank, said that although China Bank may still raise interest rates slightly in the open market, in the long run, it is unnecessary for China to follow the Fed in raising interest rates, let alone raise the benchmark deposit and loan interest rates. In absolute terms, the interest rate in China is much higher than that in foreign countries, and the CPI is not high. In addition, the problem of financing difficulty and expensive financing for SMEs has not been fundamentally solved.
What is the impact on the domestic market?
According to industry insiders, the Fed's interest rate hike this time is affirmative, which can be said to be completely within market expectations. It is not surprising to raise interest rates by 25 basis points. Without suddenness, its negative impact has been partially digested by the market in advance, thus directly reducing the impact on China's capital market.
1, RMB
JPMorgan Chase predicted that the exchange rate of RMB against the US dollar would remain stable, reaching 6.25 by the end of 20 18. Capital flows may be more balanced.
Some insiders also believe that the US dollar has strengthened recently and the RMB has slightly depreciated against the US dollar, but the effective exchange rate of the RMB has remained basically stable and even appreciated, that is, the RMB has appreciated against non-US currencies such as the euro and the pound. This shows that the current market sentiment is relatively stable and there is no obvious expectation of RMB depreciation. The recent inclusion of RMB in foreign exchange reserves in some countries will also increase the demand for RMB assets, which is conducive to the stability of RMB exchange rate. Generally speaking, it is expected that the RMB exchange rate will continue to fluctuate in both directions and remain basically stable in the future, and cross-border capital flows will continue to maintain a basic balance or a small net inflow.
2. Stock market
Zhao, chief analyst of Qi Huicai Economics, believes that with the deepening of deleveraging and shadow banking investigations, the stock market's ability to resist risks is extremely weak and it is more vulnerable to the spillover effect of the Fed's interest rate hike. The Fed's interest rate hike is likely to strengthen the market's expectation of future monetary tightening, which will lead to the weak performance of the stock market.
BOC International said that it is expected that A shares will maintain a moderate upward trend in the medium term; In the short term, shock is still the main feature of the market. Investors are advised to adopt market-neutral alpha strategy. Hold all kinds of high-quality stocks, including a few innovative stocks, growth stocks and excellent consumer stocks that can clearly prove their investment value, and short the Shanghai and Shenzhen 300 Index to obtain stable absolute investment income.
3. Real estate market
After raising interest rates, the property market interest rate continued to rise. It is certainly not easy for property buyers, especially marginal property buyers.
At present, the third rate hike is 2.00%-2.25%. If we raise interest rates for the fourth time, it is likely to break through our psychological interest rate red line!
4. Bond market
BOC International said that the continuous interest rate hike by the Federal Reserve will further restrict the monetary policy of the Bank of China. The Bank of China may raise interest rates slightly. It should be said that about 3.7-3.8% should be the reasonable level range of 10-year national debt YTM recognized by the central bank at present. In addition, we also need to consider the factors of the yield gap between China and the United States. If the yield of US 10-year treasury bonds returns to above 3% after the Fed raises interest rates in June, the spread between China and the United States will be reduced to around 60BP.
Huachuang Bond said that the domestic liquidity gap still exists at the end of the quarter, and cross-season funds should not be taken lightly; When overseas Super Week strikes, monetary policy tightening and geopolitical risks still need to be highly concerned. The uncertainty faced by the bond market has not been alleviated. It is suggested that institutions control the lever and duration and operate cautiously.
Guo Jun believes that after the release of financial data, the logic of financing contraction has been further strengthened. Although the bond market is still facing the test of the Federal Reserve's interest rate hike and economic data on Thursday, these factors have very limited impact on the bond market. In the current interest rate trading, buy when it falls sharply and sell when it rises sharply; Buy if it is not good; If it is good, sell it.
Impact on other assets
1, see more products.
The price of gold has remained at a historical low for the past five years.
Jeff Gundlach has publicly expressed his views on many commodities since the second half of 20 17. Several live broadcasts this year have expressed similar views, and the latest live broadcast is no exception. He still believes that commodity prices are still at historically low levels.
The dollar may fall below 90.
Regarding the US dollar, Jeff Gundlach is bearish on its long-term trend, and the US dollar index will fall below 90 in the next few years.
At present, many countries are trying to avoid dollar settlement, especially under the pressure of trade war. After the opening of the US dollar interest rate hike channel, many foreign reserves were weak and debts were artificially high. For many years, the currencies of economies supported by dollar debt have fallen, and dollarization is imminent.
In order to oppose the economic sanctions imposed by the United States, Venezuelan officials no longer accept dollar payment for crude oil exports. Venezuelan oil company Petróleos de Venezuela SA has informed its private joint venture partners to open euro accounts and convert existing cash into euros.
After the European Union, Japan, Russia, Iran, Venezuela, Indonesia, Malaysia, Thailand, Angola, Pakistan, Turkey and 12 big economies started different forms of dollarization, India is becoming a 13 economy.
3. The e-commerce bubble is the biggest stock market bubble in 40 years.
Regarding the stock market, Jeff Gundlach borrowed a picture of Michael Hartnett, strategist of Bank of America Merrill Lynch, and thought that the "e-commerce" bubble in the stock market was the biggest bubble in the past 40 years.