Special topic: the Fed keeps its benchmark interest rate unchanged and slows down the pace of table contraction from June.
Market expectations of interest rate cuts have emerged since FOMC at the end of March.PokerhandsThere have been major changes, and a succession of higher-than-expected data have pushed interest rate cuts again and again. Interest rates have now been cut once this year (November), and even interest rates have been raised from time to time. The 10-year US debt interest rate has also risen to 4.7%, nearly 100bp from the low at the beginning of the year. So against this backdrop, the market is worried about whether the Fed will become more hawk this time. However, as we said in the "threshold for interest rate cuts by the Federal Reserve", financial conditions need to be tightened again as soon as possible to achieve the goal of suppressing demand and inflation, although this will inevitably bring market volatility and pressure. on the contrary, it will help the interest rate reduction trading to restart as soon as possible, which is a "necessary price", otherwise it will only bring more repetition in the future. In other words, the Fed eagle is better in the short term.
Judging from the statement of the meeting and Powell's position after the meeting, the overall tone of the meeting was more balanced. On the one hand, it ruled out the possibility that the next policy operation was to raise interest rates, which made the market excited and rose sharply at one time. On the other hand, it also admitted that it would take time for inflation to slow down [1]. At the same time, as we had expected, the meeting announced that it would begin a QT Taper reduction in June, reducing the national debt from the current $60 billion to $25 billion per month, while the pace of MBS reduction remained unchanged at $35 billion per month. Because of this, U. S. stocks rallied and fell, U. S. debt rose, and the dollar index and gold reacted relatively little.
First, the path of interest rate reduction: it is still possible to cut interest rates this year, but it needs to be based on tightening financial conditions, so the Fed needs to maintain a tightening posture for a certain period of time.
With regard to the policy path that the market is concerned about, Powell delivered several messages at this meeting: 1) it may take longer to reach the Fed's desired target, which is consistent with the recent higher-than-expected inflation and employment data, and is also a message that the market has taken into account. 2) the next policy action is unlikely to be an interest rate hike, which generally removes market concerns about austerity, which is basically in line with our expectations, unless unexpected supply shocks cause inflation to spiral out of control. 3) apart from falling inflation and slowing employment (for example, the unemployment rate has risen by more than 0.2% to more than 4%), there are other possible ways to cut interest rates. We guess that it does not require a substantial deterioration in the economy to cut interest rates, but only needs to reach the appropriate window.
As can be seen from the above information, the Fed's statement is relatively balanced, fully reminding that it may take longer and more patience to cut interest rates, while dispelling the risk that the market is most worried about the need for further rate increases. We believe that in the current market environment, the Fed needs to maintain a tightening posture for a period of time, and the more eagle the better, and the resulting short-term pullback provides the basis for a subsequent rebound. On the contrary, being too dovish is not a good thing (the current situation is precisely the direct result of Powell's unexpected doves in the fourth quarter of last year). On the contrary, it will lengthen the front of inflation control and magnify the risks. we do not recommend participating in the resulting market rebound.
We believe that it is still possible to cut interest rates and do not agree with the view of swinging from one extreme (expected to cut interest rates 6-7 times at the beginning of the year) to the other extreme (currently not expected to cut or even raise interest rates), mainly based on the reflexive effect of interest rates. The recent improvement in data and exceeding expectations is the result of the excessive decline in interest rates in the fourth quarter of last year, so the current tightening of interest rates and financial conditions will also restrain demand and inflation for some time to come. Historically, after financial conditions have tightened, the probability that inflation and growth figures will be lower than expected will also rise 1-3 months later. Recent major data such as Markit manufacturing PMI in April, existing home sales in March and ISM manufacturing PMI in April have all begun to reflect this effect. In addition, we estimate that inflation may continue to fall in the coming months. Rent, oil price and transportation have contributed to the continued resilience of CPI in the past few months, but according to our segment forecast model, the core CPI will continue to decline year-on-year and month-on-month in the coming months, mainly due to the loosening of the largest rent segment. From a horizontal point of view, we estimate that the overall and core CPI will return to less than 3% and 3.5% respectively in the second half of the year, which is still far from 2%, but the downward direction can also form the basis for interest rate cuts.
But the tightening may not be enough now, so it will take some time. As of April 30, the financial conditions index was 99.63, which has not yet reached the tightening range. If financial conditions return to the tightening range of 100, the US stock market needs to adjust back 5-7% to around 4700 points. Us credit spreads widen by about 50bp, which can raise financial conditions to tight range. Therefore, the Fed also needs to maintain a tightening posture for some time to maintain the tightening of financial conditions.
Another reason we think a rate cut is still possible is that it does not have to be equated with a sharp deterioration in the economy, otherwise it would not be possible to explain just three "dabble" rate cuts in 1995 and 2019. Maintaining financial stability and preventive interest rate cuts are also important factors. The current pressure on the reversal of spreads is unprecedented in any rate-raising cycle since the 1990s, directly causing US stocks to fall during the 2022 rate-raising cycle. The continuous and deep inverted curve will put great pressure on financial institutions and become a source of constant trouble for small and medium-sized banks in the United States. So the Fed just needs to find a suitable window to cut interest rates, and it doesn't need to be done too many times. It can be seen from Powell's speech that the opening of interest rate cuts is not based on a substantial deterioration in economic data as a threshold, there are also other ways to cut interest rates.
Second, the pace of contraction: the pace began to slow down in June, and financial liquidity may improve in the third quarter.
As we had expected, in order to advance the impact of hedge statements on bank reserves (similar to the cash crunch in 2019), this meeting announced a deceleration (QT Taper) from June, with treasury bonds shrinking to $25 billion a month from $60 billion in the past, while MBS continued to maintain its monthly shrinking size of $350. At a press conference after the meeting, Powell said that slowing down the pace of table contraction will help reduce pressure on the money market and can be seen as a preventive measure. It is precisely because of the shortage of money caused by too low reserves in 2019, according to the adequacy of bank reserves, according to the current process of shrinking the balance sheet, reserves will change from excessive to moderate abundance by the end of this year, and it is appropriate for the Fed to slow down ahead of time.
缩表减速有助于降低金融流动性压力，拐点可能出现在二季度末。我们在3月初报告《美国流动性或将迎来拐点》中就提示，根据联储缩表节奏、货币市场基金的逆回购消耗速度、以及财政存款TGA账户的变化，从去年四季度开始主要因为逆回购回流推动持续改善的金融流动性，将在今年二季度迎来拐点，进而对流动性敏感资产产生不利影响，这种影响近期已经开始显现，也对市场产生了一定压力。目前市场表现距我们测算的压力点位仍有7%左右的空间。美联储6月缩表降速，根据我们测算将会从三季度开始缓解压力，使得流动性出现改善。
三、资产含义：三季度是改善时机，短债优先，长债次之，美股和信用债回调后再介入，大宗黄金也透支明显
结合上述金融条件和金融流动性两个模型，共同指向三季度后情形可能再度转好的可能性。实际上，随着美国30年按揭利率近期再度走高，作为近期美国需求好和通胀高的一个重要支撑的房地产成屋销售已经开始应声回落。届时，经过各类资产回调后的“折返跑”，以及反映到对需求和价格的再压制，都可能使得降息交易重启，资产也可能会有更好机会，只不过我们依然提示不要再像年初那样预期过多和过快降息。
从资产角度，我们认为需要适时逆势思考。正是因为金融条件和金融流动性都具备一定反身性的效果，资产调整有其“必然性”，但反而有助于降息交易的重启。因此，我们认为没必要走向另外一个极端，即预期完全不能降息，就如同在去年10月5%的利率“往高看”，今年初3.8%的利率“往低看”一样。结合美联储5月会议表态和金融条件收紧的后续经济影响，我们认为降息交易依然值得布局。从资产选择看，可以优先布局债券、黄金等避险类资产，待降息确认、经济预期修复后，可以向美股和大宗商品转向。
►美债：当前配置短债，降息交易升温切换至长债。当前由于再加息概率相对较小，短端国债是更好的选择。长端国债目前4.7%的点位基本已经对应年内不降息，计入预期较为充分。且结合财政部最新发债计划，二季度计划发债2430亿美元（一季度为7480亿美元），三季度继续发行8470亿美元，发债程度较为温和，远低于去年三季度美国国债供给大幅激增时期的1万亿美元左右单季度净发债规模。因此去年5%高点对应的国债发债压力今年出现概率并不高。
►黄金：当前点位透支，降息交易重启后仍有一定空间。基于当前实际利率2%~2.2%，美元指数105-106的估计，黄金短期合理中枢应为2100美元/盎司左右，目前黄金交易点位已高于目标点位、与美元和实际利率背离较大，短期存在透支。往后看，在实际利率1.5%-2%、美元指数102-106假设下，黄金合理中枢为2400~2500美元/盎司。降息交易重启后黄金仍有一波降息交易空间，直到降息开始一两次后结束（《上次黄金利率与美元同涨发生了什么？》）。我们复盘1971年以来的情况发现，三者同涨在历史上不常见；出现后，一个月后续转为下跌的概率接近六成，平均两个月内回吐涨幅。
►美股：当前依然有压力，回调后再介入。结合我们金融流动性和金融条件模型测算，美股回调至4700点左右金融条件可以基本达到紧缩区间。但全年看，我们对美股不悲观。在经济软着陆的基准假设下，降息后美股可能从当前的分母端逻辑切换至分子端逻辑，由经济基本面驱动美股再度反弹。
►大宗商品：同样抢跑严重，需要降息后需求侧预期好转。大宗商品虽然不直接反应在金融条件指数中，但其推动商品价格上涨和需求好转逻辑，与美股和美国信用债一样，都需要回撤才可以促成降息的最终兑现。
[1] httpspokerhands://www.federalreserve.gov/monetarypolicy/fomcpresconf20240501.htm
本文摘自：2024年5月2日已经发布的《5月FOMC：美联储短期紧一些不是坏事》
李雨婕 分析员 SAC 执业证书编号：S0080523030005 SFC CE Ref：BRG962
刘刚 分析员 SAC 执业证书编号：S0080512030003 SFC CE Ref：AVH867
杨萱庭 联系人 SAC 执业证书编号：S0080122080405
王子琳 联系人 SAC 执业证书编号：S0080123090053
法律声明
本公众号不是中国国际金融股份有限公司（下称“中金公司”）研究报告的发布平台。本公众号只是转发中金公司已发布研究报告的部分观点，订阅者若使用本公众号所载资料，有可能会因缺乏对完整报告的了解或缺乏相关的解读而对资料中的关键假设、评级、目标价等内容产生理解上的歧义。订阅者如使用本资料，须寻求专业投资顾问的指导及解读。
本公众号仅面向中金公司中国内地客户，任何不符合前述条件的订阅者，敬请订阅前自行评估接收订阅内容的适当性。订阅本公众号不构成任何合同或承诺的基础，中金公司不因任何单纯订阅本公众号的行为而将订阅人视为中金公司的客户。
一般声明
本公众号仅是转发中金公司已发布报告的部分观点，所载盈利预测、目标价格、评级、估值等观点的给予是基于一系列的假设和前提条件，订阅者只有在了解相关报告中的全部信息基础上，才可能对相关观点形成比较全面的认识。如欲了解完整观点，应参见中金研究网站（http://research.cicc.com）所载完整报告。
在法律许可的情况下，中金公司可能与本资料中提及公司正在建立或争取建立业务关系或服务关系。因此，订阅者应当考虑到中金公司及/或其相关人员可能存在影响本资料观点客观性的潜在利益冲突。与本资料相关的披露信息请访http://research.cicc.com/disclosure_cn，亦可参见近期已发布的关于相关公司的具体研究报告。