[ Is the Fed's current interest rate hike cycle over 👀 ]

With the trend of cooling inflation established, countries around the world have come to the end of raising interest rates, and emerging markets are the first to show signs of reversal
Inflation and interest rates have gradually come to an end in the first half of this year, and mature markets are affected by the tightening of the labor market, resulting in a slow decline in core inflation, so the judgment of policy shifts will be more cautious than that of emerging markets; it is expected to raise interest rates this time After the end of the cycle, although the high interest rate environment will remain for a period of time, the overall impact on the market has been relatively low😌
📝Federal Reserve: Suspension of interest rate hikes in Q2, data will be used to decide in the future
📍In June 2023, the Federal Reserve will maintain interest rates unchanged at 5 - 5.25% for the first time. At the same time, the main purpose of the statement to suspend interest rate hikes is to allow members to assess more information and its impact on monetary policy, showing that members are optimistic about the outlook China's assessment has not changed significantly, and we will wait for economic data to be released over time before further monetary policy actions
📍In addition, from the point of view of the interest rate dot plot, the median in 2023 will fall at 5.5 - 5.75%. At the same time, the median will increase in 2024 - 2025. SEP will also raise the core PCE again to 3.9% (top 3.6%) According to the core PCE of 4.7% in April, almost all (nearly all) committee members support that interest rates will still be raised within the year. The slow trend continues, and the probability of further increase in the terminal interest rate is low
📝China policy: A new round of easing is coming as scheduled
📍Accumulated since the beginning of 2022, the 1-year MLF, 1-year LPR, and 5-year LPR have been reduced from 2.95%, 3.8% and 4.6% to 2.65%, 3.55% and 4.2%, guiding the weighted rate of general loans in Q1 to remain at historical levels low
📍Q2 once again launched a new round of easing policies. On June 13, the 7-day reverse repurchase rate and the Standing Lending Facility (SLF) were reduced to 1.9% (previously 2.0%) and 2.9% (previously 3.0%) respectively. The interest rate corridor moved down, and then cut the medium-term lending facility (MLF) to 2.65% (previously 2.75%) on 6/15, pushing the 1-year and 5-year LPR down again on 6/20 by 10 bp to 3.55% (previously 3.65%) %), 4.20% (the previous 4.30%), the market expects another 50 basis points in the second half of the year
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