Markets Weekly April 20, 2024

Hello my friends, today is April 20th and this is Markets Weekly. So this week was a terrible week in markets. We had relentless non-stop selling every single day. And if you look at the leaders of the last rally, like Nvidia, it looks like they're imploding. Markets seem to be more and more concerned about higher interest rates and also the potential for geopolitical conflict. Now I was thinking that we would get support at the 50 day moving average, but that was totally wrong. Right now we're around the 100 day moving average, so let's see if we get some support there.

大家好，今天是4月20日，这里是市场周报。本周市场表现非常糟糕。每一天都有持续不断的抛售。如果看看上一次涨势的领头股，比如英伟达，看起来它们正在崩溃。市场似乎越来越担心利率上涨和地缘政治冲突的潜在可能。我曾认为我们会在50天的移动平均线得到支撑，但我错了。现在我们处于100天移动平均线附近，让我们看看能不能在那里得到支撑。

So today I want to talk about three things. First, over the past week we got a lot of FedSpeak and it's sounding more hawkish than usual. In fact, there are even whispers that maybe the Fed's next move is going to be a hike. Let's listen to what the Fed's speakers are saying and discuss what it might mean. Secondly, this past week the IMF came out with its latest fiscal report and they are sounding the alarm on the US fiscal situation and expressing concern that it might spill over to other countries. Let's take a look at the report.

今天我想谈的三件事情。首先，过去一周我们听到了很多美联储的讲话，听起来比以往更鹰派。事实上，甚至有传言说可能美联储的下一步行动会是加息。让我们听听美联储发言人们在说什么，讨论这可能意味着什么。其次，上周国际货币基金组织发布了最新的财政报告，他们对美国财政状况发出了警告，并对可能波及其他国家表示担忧。让我们来看看这份报告。

And lastly, Politico is out with a very interesting story noting that former Trump officials are suggesting that a future Trump administration might be willing to deploy currency devaluation as one of its tools in its trade war. Now this is something we haven't seen in decades, so let's talk about what it might mean.

最后，Politico发布了一则非常有趣的故事，指出前特朗普官员表示未来特朗普政府可能会愿意在贸易战中使用货币贬值作为其工具之一。现在这是几十年来我们从未见过的情况，让我们讨论一下可能意味着什么。

Starting with FedSpeak. So this past week we got FedSpeak from Chair Powell himself and also president of the New York Fed, John Williams and they were sounding more hawkish than usual. So just to love us a little bit, over the past few months inflation data has been coming in hotter than expected. Now as recently as March, the Fed still guided towards three cuts this year.

从FedSpeak开始。所以在过去的这周，我们得到了来自鲍威尔主席和纽约联储总裁约翰·威廉姆斯的FedSpeak，他们的立场比平时更加鹰派。因此，简单来说，过去几个月的通胀数据一直高于预期。就在三月份，联储还在指引今年将会有三次降息。

And when Chair Powell was asked about the hotter than expected inflation data, he basically just shrugged and said it was seasonal stuff. So he gave a pretty double spin. He's changing his tune now though. Let's listen to what he said this past week. The recent data have clearly not given us greater confidence and instead indicate that it's likely to take longer than expected to achieve that confidence. That said, we think policy is well positioned to handle the risks that we face. If higher inflation does persist, we can maintain the current level of restriction for as long as needed. At the same time we have significant space to ease should the labor market unexpectedly weaken. So basically, Chair Powell was noting that progress towards this inflation seems to have stalled.

当有人问鲍威尔主席关于比预期更高的通胀数据时，他基本上只是耸耸肩说这是季节性的。所以他表达了一种双重态度。不过现在他改变了他的看法。让我们听听他上周说了什么。最近的数据明显没有给我们更大的信心，而是表明实现这种信心可能需要比预期更长的时间。尽管如此，我们认为政策已经做好了面对我们面临的风险。如果更高的通胀持续存在，我们可以保持当前的限制水平直至需要。同时，如果劳动力市场出现意外的弱化，我们也有充足的空间来放宽政策。所以基本上，鲍威尔主席指出，朝着这种通胀的进展似乎已经停滞不前。

So the Fed targets PCE and PCE year over year seems to be around 2.7%. We don't have the latest data yet. That comes out next Friday, but it looks like the Fed is expecting it to be too high. And so Chair Powell is unhappy with the progress he's made towards this inflation and now signaling that he wants to hold rates around here for longer than he had anticipated. So I'm listening to this and thinking that he's probably taking a June cut off the table.

因此，美联储的目标是核心个人消费支出指数，而核心个人消费支出指数同比增长似乎在2.7%左右。我们还没有最新数据。下周五就会公布，但看起来美联储预计这个数字会偏高。因此，鲍威尔主席对自己在控制通胀方面取得的进展感到不满，现在表明他希望将利率维持在目前水平的时间比预期更长。我听到这些消息后觉得，他可能会将六月份的降息排除在选项之外。

Now in addition to Chair Powell, we also had a discussion from a New York Fed person John Williams. Now interestingly, John Williams was asked point blank whether or not he would high rates given the strong economic data we've seen so far. Let's listen to what he said. So is there a possibility the Fed could even raise rates? It's not my baseline. My expectation right now is that interest rates are in a good place and eventually at some point would want to lower interest rates as the economy really gets to the 2% inflation that we're headed towards. Of course, you never know what can happen.

现在除了鲍威尔主席外，我们还听取了纽约联邦储备银行代表约翰·威廉斯的看法。有趣的是，约翰·威廉斯被直接问及是否会考虑在目前看到的强劲经济数据下加息。让我们听听他的回答。那么，美联储甚至可能会加息吗？这不是我的基准预期。我目前的期望是利率现在处于一个良好的水平，最终在经济真正达到我们所前进的2%通胀时，可能会考虑降低利率。当然，你永远不知道会发生什么。

If the basically, if the data are telling us that we would need higher interest rates to achieve our goals, then we would obviously want to do that. So John Williams, of course, being a central banker, he's never going to say he never, right? He's never going to say I'm never going to high rates or something like that because he doesn't know what the future is. He wants to keep his options open. He just said that he thinks that we're going to cut rates this year. But of course, if data evolves in an anticipated way, like inflation goes back up and so forth.

如果基本上，如果数据告诉我们需要更高的利率来实现我们的目标，那么我们显然会这样做。因此，约翰·威廉姆斯当然作为一名央行家，他永远不会说永远不会提高利率之类的话，因为他不知道未来会是什么样子。他想保持选择的余地。他只是说他认为今年我们会降息。但当然，如果数据以预期的方式发展，比如通货膨胀再次上升等等。

He doesn't want to preclude his options, which is of course what else is he supposed to say. But I think there are some people who listened to this and thought, well, you're saying it's not impossible, right? So maybe the Fed will high-crate again. But I think that's really missing the point. Later on in the discussion, he goes on and he explains that the stronger than expected US data seems to be largely due to increases in supply rather than overheating demand. And again, the Fed acts, the Fed's tools act on demand. If demand is too strong, then they will try to raise interest rates to cool it down. But if strong job growth, strong economic growth is due to increases in supply like migration and stuff like that, then it really doesn't call for the use of the Fed's tools. So I think that seems to be a bit of a misunderstanding. In any case, the market looking at all the data and taking the Fed speak in stride is right now pricing in about 1.5 cuts this year. As early as January, it was pricing in seven, Fed guided towards three in March and now they're pricing in 1.5. It's a very volatile series.

他不想排除任何选择，当然他还能说什么。但我认为有些人听到这个观点可能会想，你说这不是不可能的，对吧？所以也许美联储会再次加息。但我觉得这样的想法有些误解。在讨论中，他继续解释说，比预期强劲的美国数据似乎主要是由于供应增加而不是需求过热。而美联储的工具是针对需求采取行动的。如果需求过强，他们将尝试提高利率以降低需求。但如果强劲的就业增长和经济增长主要是由于供应增加，比如移民等因素造成的，那么实际上并不需要使用美联储的工具。我觉得这似乎有些误解。无论如何，市场正对所有数据进行分析，并对美联储的发言采取谨慎态度，目前正在预测今年将有1.5次降息。早在一月份，市场曾预测会有七次降息，美联储在三月份指导为三次，现在市场预测为1.5次。这是一个非常波动的系列。

But I suspect that the market is a bit too hawkish here. Now this re-pricing of the path of Fed policy is also what's pushing up interest rates up across the curve where the 10-year yield is as high as 4.6%. And that is causing some stress, I think, in the risk assets. But if we rewind a bit just two years ago, I think when many everyone was saying that Fed funds at 5% interest rates so high, it's going to cause the US economy to tumble into a recession. Things are going to be really bad. Now today, of course, Fed funds comfortably above 5%, US economy continues to grow above trend. So that perspective was totally wrong. People misunderstood the impact of interest rates on the real economy. And I suspect they are also misunderstanding the impact of interest rates on the financial markets as well. And that's what I'm going to write about in my blog this week.

我怀疑市场在这里有点太鹰派了。现在，联邦政策路径的重新定价也推动了各个期限利率上升，其中10年期收益率高达4.6%。我认为这造成了一些压力，会影响到风险资产。但如果我们回顾一下仅仅两年前，当时许多人都说联邦基金利率达到5%，利率这么高，会导致美国经济陷入衰退。情况会变得非常糟糕。现在，当然，联邦基金利率已经轻松超过5%，美国经济继续高于趋势增长。所以那时的观点完全错误。人们误解了利率对实体经济的影响。而我怀疑他们也误解了利率对金融市场的影响。这正是我本周将在我的博客中写的内容。

I suspect that the risk assets, the equity markets are going to shake off these, say, high interest rates because honestly, they are not that high given where we are, given the fiscal situation and so forth. Okay. The second thing that I want to talk about is the IMF's latest fiscal report. Now the IMF, again, is a political organization. So whatever they publish, it's going to be improved by the respective government. For example, if they write a report on the economy of France, whatever they write is going to be a subject to the approval of the French government. So you're never going to get anything super cutting edge or super controversial from these public sector organizations, but they are really good at doing bread and butter economic analysis.

我认为风险资产，即股票市场将会摆脱这些所谓的高利率，因为老实说，考虑到我们目前的情况，考虑到财政状况等等，这些利率并不算高。好的，我接下来想谈一下IMF最新的财政报告。现在IMF再次是一个政治组织。所以无论他们发布什么，都会经过各个政府的批准。例如，如果他们写了一份关于法国经济的报告，无论他们写了什么都会经过法国政府的批准。因此你永远不会从这些公共部门组织那里得到什么尖端或有争议的东西，但他们真的擅长做基础的经济分析。

Now, in their latest report on the fiscal sustainability of countries, they are highlighting concern about the US fiscal situation. So in it, you can take a look at this chart where they show that going forward, the fiscal deficit in the US is strikingly high compared to other countries. So other countries, it looks like over the next few years, their fiscal deficit is expected to, let's say, be around 2% and 3%. But the US really stands out as having a fiscal deficit that's expected to be about 6% for the foreseeable future. Now again, this has tremendous implications for asset pricing. And I think that this is basically inflationary and also it boosts asset prices. It's something that is honestly, we see over and over again throughout history and across the world in many different kinds of fiscal regimes. But what the IMF is highlighting here is that this is going to be, this is going to create problems for other countries. Why? Because there is a link between US interest rates and the US fiscal deficit. Obviously, everything is just supply and demand. So when you have a higher fiscal deficit, you have more issuance in treasury securities and so, treasury use go higher. Here's the IMF doing some analysis showing that 1% increase in the primary deficit pushes up what they call term premium, basically interest rates slightly, slightly higher.

现在，在他们最新的国家财政可持续性报告中，他们对美国的财政状况表示关注。因此，在报告中，您可以查看这张图表，在这张图表中，他们展示了未来，美国的财政赤字与其他国家相比显著高。因此，从其他国家来看，未来几年，他们的财政赤字预计将保持在2%和3%左右。但是美国真的很突出，其财政赤字预计在可预见的未来将达到约6%。现在再一次，这对资产定价有着重大影响。我认为这基本上是通货膨胀的，并且也提振了资产价格。这是可以说是，我们在历史上和世界各地许多不同种类的财政制度中反复看到的事情。但IMF在这里强调的是，这将会给其他国家带来问题。为什么？因为美国利率与美国财政赤字之间存在联系。显然，一切都只是供给和需求。当您拥有较高的财政赤字时，您会发行更多国债，因此国债使用就会上升。这里是IMF做一些分析，他们显示，主要赤字增加1%会稍微推高他们所称的期限溢价，基本上使利率略微增加。

Now this is something that's, this type of analysis, it's not physics, so it's going to be subject to a lot of things like sentiment, like all sorts of other expectations, it's ends and things like that. But again, not rocket science issue more treasuries, interest rates go higher. So that's one thing that they are noting. The other thing that they're noting is that when treasury yields go up, it also drags up bond yields across the world. After all, capital is global and the US is the reserve, US dollar is the reserve currency.

现在这是一件事情，这种类型的分析，并非物理学，因此会受到很多诸如情绪、各种其他期望之类的影响。但再次强调，这并不是什么高深的问题，更多是国债、利率上升的问题。这是他们所注意到的一点。另一点是，当国债收益率上升时，也会拖动全球各地的债券收益率上升。毕竟，资本是全球的，美国是储备货币，美元是储备货币。

So when US interest rates go higher, obviously global investors are looking across the road and saying, hey, why am I investing in say this country at 3% when I can invest in, let's see in the US at 5%. After all, the US is a reserve currency, deep and look at markets, dollars are better than whatever other currency that I'm investing in. So when US treasury yields go up, it tends to drag up yields in other countries.

所以当美国利率上涨时，显然全球投资者会朝这边看，说，嘿，为什么我要以3%的利率投资在某个国家，而不是选择在美国以5%的利率投资呢？毕竟，美国是一个储备货币，市场深厚，美元比我正在投资的任何其他货币都要好。因此，当美国国债收益率上升时，往往会带动其他国家的收益率上升。

So this analysis by the IMF shows that 1% upward move in treasury yields basically drags up advanced economy yields and also developing economy yields up by around 1% as well. So if the US continues to run a fiscal deficit of 6%, well, treasury yields are going to go up and that's going to tighten financial conditions globally. The problem arises when, well, everyone's economy is in different situations.

国际货币基金组织进行的分析显示，国债收益率上涨1％基本上将带动发达经济体和发展中国家的收益率上涨约1％。因此，如果美国继续保持6％的财政赤字，国债收益率将会上升，全球的金融状况将会收紧。问题出现在当每个国家的经济处于不同的情况时。

As we know, the US economy is doing fine, growth is above trend, but that's not necessarily the case, say in Canada, in the UK or in the Eurozone. So in a sense, the US economy, US fiscal deficit is going to maybe make policy too tight for other countries and maybe push them into recession. And that's something that other countries are going to have to deal with. So that's the IMF saying this and I'm pretty sure that no one in Congress is going to listen, but it's something to keep in mind because it would also have implications on let's say currency, for example, as the US economy runs a large fiscal deficit, we could have treasury yields go higher that could draw in more cash from other countries and continue to strengthen the dollar like it's doing now, which leads us to our third topic.

正如我们所知道的，美国经济表现良好，增长超过趋势，但并非所有国家都如此，比如加拿大、英国或欧元区。因此，在某种程度上，美国经济、美国财政赤字可能会使其他国家的政策过于紧缩，可能会推动它们陷入衰退。这是国际货币基金组织的观点，我相当肯定国会里没有人会听取，但这是需要记住的事情，因为这也会对货币产生影响，例如，随着美国经济财政赤字的扩大，我们可能会看到国债收益率升高，这可能会吸引更多来自其他国家的现金，继续推动美元的升值，就像现在正在发生的情况一样，这将引出我们的第三个话题。

So there's a very interesting story in Politico citing Robert Leitinger, former trade official and the Trump administration saying that these guys, they're thinking that it would be a good idea to depreciate the dollar to fight a trade war. Now just a level set a little bit. Now if you went to school and you studied economics, they would tell you that free trade, everything super good compared to advantage makes the pie bigger. And that's totally true, but the gains in trade are not evenly distributed.

在Politico上有一个非常有趣的故事，援引了特朗普政府的前贸易官员Robert Leitinger的话，他们认为贬值美元是对抗贸易战的一个好主意。现在稍微澄清一下。如果你上学学过经济学，他们会告诉你自由贸易很好，比优势使蛋糕更大。这完全正确，但是贸易带来的收益并不是均匀分布的。

So when we had free trade, well, we have free trade. For example, what's happens is that, well, US companies, the all-source manufacturing to other countries like China and US companies are really happy because they reduce their costs, profits go up. China is very happy because it creates jobs for millions of people and the US consumers are happy because they get cheaper products. But there is a group who loses due to free trade and that's the American factory workers. They basically become jobless and lose their place in society and have really difficult times fighting work.

所以，当我们有自由贸易时，我们就有自由贸易。举个例子，美国公司会把所有生产转移到中国等其他国家，美国公司会很高兴，因为他们能降低成本，利润增加。中国也会很高兴，因为这给数百万人创造了就业机会，美国消费者也会很高兴，因为他们可以买到更便宜的产品。但有一个群体因为自由贸易而受到损失，那就是美国的工厂工人。他们基本上失业了，失去了在社会中的地位，寻找工作变得非常困难。

Now again, the overall pie is bigger, but it's unevenly distributed. Now how you value these distributions is ultimately a political judgment and the Trump administration has pretty consistent that he thinks it's more important for these manufacturing workers to be able to have jobs than it is for say companies that have bigger profits or for American consumers to have slightly cheaper products. And so the Trump administration, the first Trump administration has been employing tools to try to adjust the trade saturation and to encourage more products to be made in America.

现在，总体来说，蛋糕变大了，但分配并不均匀。你如何看待这些分配最终是一个政治判断，而特朗普政府一直认为让制造业工人能够就业比让公司获得更多利润或美国消费者买到稍微便宜的产品更重要。因此，特朗普政府，第一个特朗普政府一直在采取措施试图调整贸易饱和度，并鼓励更多的产品在美国制造。

They did this by putting on tariffs to China and thus raising the price of imported goods hoping that it would make American companies a bit more competitive, maybe create jobs here. Now the success of that, it's mixed and it's always hard to say. Largely it seems to be continued by the Biden administration. Now these policies actually have a very long history. Do all hundreds of years governments wanting to protect their jobs of their own workers have enacted trade barriers. Another common tool that governments have employed is to depreciate their currency.

他们通过对中国加征关税来实现这一目标，从而提高进口商品的价格，希望这能够使美国公司在一定程度上更具竞争力，可能会在这里创造就业机会。现在这样做的成功情况，评价参差不齐，很难说清楚。这种政策在拜登政府领导下似乎会继续。这些政策实际上有着非常悠久的历史。数百年来，各国政府为了保护本国工人的工作岗位而实施贸易壁垒是司空见惯的。政府采用的另一种常见手段是贬值本币。

So the whole point of this of course is to discourage imports and encourage exports. You can do this by increasing the price of imports through tariffs or you can also depreciate your own currency and make imports more expensive and your own exports cheaper to foreign markets. Now Robert Leitinger is suggesting that hey let's let's you know we can do trade barriers like tariffs but we can also depreciate the dollar. Now this is something the US has done before as recently as the 1980s which during what was called the Plaza Court.

因此，这一举措的整体目的当然是抑制进口，促进出口。您可以通过征收关税来提高进口商品的价格，也可以贬值自己的货币，使进口商品更加昂贵，自己的出口对外市场更具竞争力。现在罗伯特·莱廷格建议说，嘿，我们可以设置贸易壁垒，比如征收关税，也可以贬值美元。美国过去曾多次这样做，最近一次是在上世纪80年代，被称为普拉萨协议。

Now at that time if you can see from this chart the US dollar strengthened to just crazy levels. It strengthened rapidly for two reasons. One as we recall at that time Fetchur Volcker was raising interest rates really high trying to get inflation under control and at the same time we also had pretty profligate physical spending and that seemed to be pushing up longer dated treasury yields. So kind of like where we are today. Higher US interest rates higher than the rest of the world and treasury yields rising that led the dollar back then to appreciate significantly and it was causing a lot of political problems for the administration. American manufacturers were complaining and so what they did was they got everyone together and said hey I want to depreciate the dollar so I want you to appreciate your currency against the dollar. And if you don't do this we're going to put tariffs on you and everyone basically complied and we did see the dollar depreciate as a result of that meeting. So this is something that could definitely happen again and if monetary policy at the Fed continues to be more hawkish than the rest of the world we can actually easily see a scenario where you know maybe we have a repeat where the dollar continues to strengthen and strengthens the case for a dollar depreciation some kind of Trump accord in the event of a second Trump administration.

那时，如果你看这份图表，可以看到美元升值到疯狂的水平。美元迅速升值的原因有两个。首先，就像我们记得的那样，弗契尔·沃尔克当时提高利率，试图控制通货膨胀，同时我们也有相当奢侈的财政支出，似乎推高了更长期的国债收益率。就像我们今天所处的情况一样。美国利率高于其他国家，国债收益率上升，这使得美元当时大幅升值，给政府带来了很多政治问题。美国制造商在抱怨，所以他们召集了大家一起开会，说：“我想要让美元贬值，所以我要求你们升值你们的货币对美元。”如果你们不这样做，我们将对你们征收关税，结果大家基本上都遵从了，我们确实看到了美元因此贬值。这是有可能再次发生的事情，如果美联储的货币政策继续比其他国家更为鹰派，我们很容易会看到这样的情况，也许会重复历史，美元继续升值，加强了在第二任特朗普政府下某种特朗普协议导致美元贬值的情况。

Now depreciating a dollar historically speaking is very risk positive. It loosens financial conditions throughout the world and is positive for equity prices. Again there's a lot of different ways that they can do this and I think in the future I will write about different ways they can do this. Right now of course this is very preliminary we don't even know who's going to win the election and we don't even know if Robert Leitinger is going to have a senior role in the Trump administration. But I think it's very interesting that they are talking about this and basically bringing currency depreciation which was a common tool used by governments throughout history back out.

从历史上来说，美元贬值是非常有风险积极的。这会放松全球金融条件，对股票价格是有利的。他们可以用很多不同的方式来实现这一点，我认为将来我会写一篇关于他们可以这样做的不同方式的文章。当然，现在这只是非常初步的阶段，我们甚至不知道谁会赢得选举，也不知道罗伯特·莱廷格是否会在特朗普政府中担任高级职务。但我认为他们正在讨论这个问题并且基本上重新推出了货币贬值这种历史上政府经常使用的工具，这是非常有趣的。

Alright so that's all I prepared for today thanks so much for tuning in check out my blog fengai.com for my latest market thoughts and if you're interested in learning more about how markets work check out my online courses at centralbaking101.com talk to you all next week.

好的，这就是我今天准备的所有内容，非常感谢你们的收看。请访问我的博客fengai.com获取我最新的市场见解。如果你想了解更多关于市场运作的知识，请查看我在centralbaking101.com上的在线课程。我们下周再聊。谢谢！