Three potential black swans are about to strike this week: interest rate hikes in Japan, the U.S. debt ceiling, and a rebound in CPI, which will repeatedly test the global capital markets, likely leading to another severe blow! Will there be unexpected shocks before the King of Understandings takes office? (Part II)
The second black swan is the expiration of the U.S. debt ceiling. Many of you might think this is old news, just another tale of the wolf coming. But I remind everyone that even if the U.S. debt ceiling is resolved on schedule, it won't be good news for the market; rather, it will be bad news. Because once the debt ceiling is resolved, the U.S. government will have to rush to issue bonds, which will absorb liquidity from the market and siphon off excess money available in the market. This will lead to a liquidity-induced chain reaction in the downward movement of U.S. stocks and major assets. U.S. bank reserve ratios have already dropped to the lower limit of 8%, and if the debt ceiling releases a liquidity weapon, the Federal Reserve may ultimately have no choice but to pause or end the balance sheet reduction to rescue the market, which could be the biggest savior for the market.
The third black swan is the U.S. inflation CPI, which the market is most concerned about and is set to be announced next week. The CPI for December is expected to rebound, largely due to the low base from last December's CPI. However, the market is currently on edge, as those drowning are desperately grasping at the Fed's interest rate cuts as their only lifeboat. But this lifeboat has already begun to leak; after last week's unexpectedly strong non-farm payroll data, everyone believes the Fed may only cut rates once this year, or perhaps not at all, and the friendship boat is at risk of breaking apart.
So, which of these three black swans will break through the market this week? Will there be unexpected shocks before the King of Understandings takes office?
As a seasoned cryptocurrency investor, I, Tu Fei, share my experiences and insights. Interested in the crypto world but don’t know where to start? Follow me and check my profile to achieve freedom in this bull market.
