"Didi ......"

Just when Zhong Shi and his team in Hong Kong were discussing the content of the Fed's possible announcement tomorrow, the BlackBerry phone placed on his side suddenly rang suddenly, and Zhong Shi picked up the phone and looked at it after accusing others, and an email without a name was sent to his mailbox.

This mailbox is the mailbox for handling the company's affairs, and it is also the mailbox for public announcement. Although it was announced to the public, in fact, not many people knew about it. Zhong Shi secretly cursed, and was about to delete it, when suddenly the sender's address attracted his attention, and the suffix was Stanley Company.

Stopping as he was about to press the deleted finger, Zhong Shi playfully looked at the address of the mailbox, then gently put his phone aside and began to search Google for the sender's name. Naturally, he basically couldn't find anything about this kind of internal email. After a while, he closed the webpage, threw away the mouse, and picked up the phone again, thinking about whether to click on it.

It's just that at this time, when he clicked on the mailbox page again, he was stunned to find that he didn't know when, the email had been revoked by the other party. It's impossible to even open it now, Zhong Shi smiled bitterly, realizing that the other party might have sent it wrong, so he put down his phone and continued to discuss with Hong Kong about the possible meeting decision of the Federal Reserve tomorrow.

“…… Because of the increased risk of subprime mortgages, even the Fed's statement above removed the word 'prudent', so we judge that while the Fed injects money into the market, it is also possible to take other corresponding measures to stimulate the economy and maintain the growth of the US economy. In terms of the timing of interest rate cuts, the Fed may not have much patience. In addition, this month's housing starts and non-farm unemployment rates were both unsatisfactory, which is believed to be affected by subprime mortgages. We thought that in mid-August, the Fed would announce its decision to lower interest rates. But in fact they didn't do it. So the possibility of a rate cut this month has increased dramatically......"

“…… In addition, from an inflationary point of view, the previous Fed rate hikes have brought forward interest rate expectations to an appropriate level, and the possibility of inflation is almost non-existent. The median interest rate expectations for August have fallen from 5.75 to 5.25. Based on the fact that on 17 April, the Fed cut interest rates by 50 basis points, we can predict that interest rate policy has officially entered a downward channel. Although interest rates were cut in April, it was most likely in response to the subprime mortgage crisis that occurred at that time......"

……

The economist on the other side of the phone is explaining his predictions for tomorrow's Fed decision in various aspects, and most of them are naturally the argument for lowering interest rates. However, like Stanley, there is no consensus on whether the Fed will announce a rate cut at this month's policymaking meeting. It's just that they didn't argue for long, and a voice sounded sharply, "Stanley's latest forecast is that tomorrow's FOMC meeting will announce an interest rate cut, and the rate cut may be larger." Between 50 basis points and 75 basis points. ”

Before each Fed meeting, economists at various investment banks publish outlooks predicting what the Fed is likely to do and how it will impact the market. Of course, these opinions are only a dispensable reference for the economists of Tianyu Fund, after all, they are not inferior to these economists working in investment banks in terms of academic level and judgment ability.

But this time the situation is different, although Stanley has previously issued a similar report. However, it is extremely cautious in its wording, saying only that it will conduct a detailed analysis as soon as the FOMC meeting decision is announced. And the underlying meaning behind these words is: We don't know what to expect, and all we can tell you is that we'll interpret what they post to you, but if we were to give you an accurate prediction, we would have nothing to say.

But now, unusually, even the Fed is telling customers about the magnitude of the likely rate cut. As the saying goes, if something goes wrong, it will be a demon. If there is any inside story behind it, then there is a consensus within Stanley that the Fed's interest rate cut is inevitable.

"If interest rates are cut, what will be the impact on subprime mortgages and related derivatives?" After frowning and thinking about it, Zhong Shi really asked the debt expert on the other end of the phone.

Rate cuts in general. It is a good thing for the capital market. Whether it is an interest rate cut or an interest rate increase, it is the total amount of liquidity. Unlike the lethal reserve ratio adjustment, the adjustment of interest rates has more room for flexibility, so the central bank is generally more inclined to use the tool of adjusting interest rates when economic activities do not fluctuate sharply.

"A rate cut would be a challenge to both short-term and long-term interest rates. When short-term interest rates fall, bond yields will inevitably fall, and prices will rise, which seems to be a strong support for bonds themselves. As for long-term interest rates, there is an expectation that forward interest rates will fall, which also makes capital more willing to hold long-term treasury bonds and other investment products, which is conducive to the US government to expand the scale of debt and raise more funds to invest in economic activities. This is undoubtedly a shot in the arm to inject a boost into the economic downturn, but whether it can really curb the economic downturn depends on the market game. It's hard to say at the moment, but if the economy continues to decline, I don't rule out the possibility of further interest rate cuts. ”

"It may boost confidence in the bond market in the short term, but in the long term, fundamentals still determine supply and demand. Regarding the subprime mortgage market, I personally think that it is unlikely to change, there are too many people who have stopped providing mortgages, and the national home price index has fallen for six consecutive months, I believe this fact is enough to make most new buyers choose to wait and see, after all, the crisis has not been completely resolved. As for the derivatives market, I personally think that liquidity may improve in the short term, but after all, the root cause is still deteriorating, and it cannot be ruled out that the market will continue to slide and collapse. ”

A bond expert named Suhe gushed out, and in the end he gave a more pessimistic outlook.

"Okay, since that's the case, let's keep observing!" After fully discussing the situation in various aspects, Zhong Shi realized that it should be late at night on the Hong Kong side, and these people were already exhausted after such intense brain activity. So after listening to the opinion, he planned to end the conference call immediately so that they could rest early.

"One more thing, boss!" Just as everyone was about to press down the end microphone, Zhang Hua spoke out inappropriately, "I just received an email from the risk department of Stanley Company, but the content of the email was sent to Prince Faisal, and it is obvious that they sent it to the wrong address. Oh my God, how could they make such a low-level mistake! ”

In the midst of laughter, the red lights on the conference plane dimmed one by one. Obviously, most people don't take it seriously, it's just a low-level mistake. Zhong Shi also turned off the phone with a smile, but the next moment his face became gloomy, and he realized that this could definitely not be a low-level mistake! (To be continued......)

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