Recently, the personnel changes at the Federal Reserve have been a bit urgent, leading to a sudden 'cooling' of market expectations for interest rate cuts overnight—the probability of rate cuts dropped directly by 10%. Many people are pondering: will the wallet hurt first or later?
Just uncovered key information from the news: U.S. Treasury Secretary Basant recently sent a clear signal: Before September, Stephen Milan is highly likely to officially take the position of Chairman of the Federal Reserve. This guy's resume is such that calling him the 'financial firefighting ceiling' would not be an exaggeration—he stabilized the situation during the 2008 Wall Street crisis and withstood pressure during the 2012 European debt turmoil. Over the years, he's specialized in tackling 'tough nuts' in finance and has a solid approach to dealing with various market risks.
But now, America's economic situation is a bit 'dilemma': inflation is still stuck above 3%, and the unemployment rate has climbed to 4.2%, putting pressure on both ends. Milan has always been a staunch advocate of 'first controlling inflation, then discussing interest rate cuts.' As soon as this news came out, the market immediately cut the expectation of a rate cut in September from 50% to 40%, showing a very direct change in attitude.
For ordinary people in China, this wave of changes is not 'far away'; at least three things are directly linked to our wallets:
First, the US Treasury bond yields have not decreased. Friends holding related US dollar investments are likely to maintain high returns, so there is no need to worry too much about a plunge in returns in the short term.
Second, the RMB exchange rate may fluctuate more significantly. For those planning to study abroad or travel who need to exchange currency, keep a close eye on the exchange rate trends and pick a suitable time to act.
Third, for friends in foreign trade, this may be a potential positive news—under relevant policy preferences, export orders may increase, bringing a wave of small opportunities.
The current market sentiment is also quite divided: some are worried that inflation has not been controlled, and their money will become 'more hairy'; others hope the US dollar can strengthen further to earn more returns. But for ordinary people, a Federal Reserve that does not casually print money and can stabilize inflation is more substantial than any 'verbal benefits.'
As for whether the wallet is warm or cold, it won't take long to guess—once Milan's position and policy direction in September are set, the answer will likely be clear.
