In a bull market, in addition to paying attention to the general trend of the market, I also pay special attention to changes in the macroeconomic environment. why? Because changes in the macroeconomic environment will affect the trend of the bull market.
Regarding the macro environment of this round of market, there has always been a general consensus within and outside the industry. Some time ago, the Fed Chairman made it clear in his latest speech that interest rate hikes might not start until 2023. This is considered the greatest comfort to market sentiment.
A few days ago, Brazil, Russia, Turkey and other countries have begun to raise interest rates, and Turkey's interest rate hike even immediately led to the collapse of the national currency exchange rate and the stock market. Yesterday, it was reported that Canada, a developed country, might withdraw from the loose policy.
Why are the financial policies of these countries beginning to tighten?
Because on the one hand, countries around the world are beginning to feel uneasy about the inflation caused by the surge in various assets; on the other hand, with the launch of vaccines, the economies of all countries have a tendency to recover, which will further lead to rising inflation; In the end, many scholars pointed out that the United States might start raising interest rates or tightening policies ahead of schedule (rather than in 2023).
Therefore, instead of waiting for the United States to start tightening policies and being forced to be sheared, these countries might as well start raising interest rates now. The damage to the country’s economy from raising interest rates is obvious to all. So this is really a bitter pill that I have to take.
So for the United States, the initiator of this round of money release, how do scholars estimate its future direction? I agree with the following view:
The United States will continue to release money , and after the first 1.9 trillion US dollars, there will be several trillion (some say 4 trillion) US dollars in infrastructure plans, and continue to maintain zero interest rates.
In addition, with the gradual push for vaccination in the United States, it is very likely that a large-scale vaccination will be obtained in June or even the second half of the year, so that life and work will gradually return to normal.
With continued stimulus and normality, the U.S. economy has gradually moved on track and rebounded strongly. Next, inflation accelerated, surpassing the 2% target set by the Federal Reserve, and even exceeded 2% to reach 2.5%. But the price is that inflation may linger at a high level for a period of time, eventually forcing the Fed to raise interest rates early.
Once the Fed raises interest rates, all the world's asset feast will come to an end, and the bubble will begin to collapse. Digital currency may not be spared either.
So when will this happen?
For this set of previews and speculations, I think the key is to understand its logical main line and development process, and grasp its key nodes: one is the inflation rate in the United States, and the other is the point in time when the Fed may raise interest rates .
Once the inflation rate in the United States reaches 2%, we will begin to be vigilant and prepare to formulate our own exit plan; once it exceeds 2% and lasts for several months, the peak of this bull market may be near; once the Fed officially raises interest rates , Then we can no longer have any illusions about the bubble and have to make the final clearance action.
The evolution of this macro environment is the fundamental bottom line for us to grasp the cash in this round of bull market. We can cash out before this, which is just a little less money, and we can't go crazy and fight after that, otherwise we'll probably have to wait for another turn on the high hills.