Recently, Wall Street bosses have criticized the Fed one after another. First, Soros's former advisor and legendary fund manager Stanley Druckenmiller was "angry" at the Federal Reserve. The Fed's sustained huge monetary easing policy has encouraged excessive behavior in the financial markets, and the policy should be adjusted immediately to minimize the risk.

In addition, Dalio, founder of the hedge fund Qiaoshui, also warned that the Biden government's economic plan increased the risk of inflation and depreciation of the dollar, allowing too much money to flow into the economy, creating the risk of creating bubbles.

Inflation expectations once again affected the U. S. stock market, high-valued technology stocks "shivering." Since May, the five U.S. technology giants FAAMG-Facebook, Apple Inc, Amazon.Com Inc, Microsoft Corp and Alphabet Inc-CL C have been weak, wiping $293.1 billion (1.8867 trillion yuan) off their total market capitalization.

Soros's former advisors were "angry" at the Federal Reserve.

More and more Wall Street bosses are beginning to worry about the potential risks posed by the Fed's endless "release of water".

Recently, Stanley Druckenmiller, Soros's former military adviser and close comrade-in-arms, published a column entitled "angry" at the Federal Reserve: because the Fed's continued huge monetary easing policy has encouraged excessive behavior in the financial markets, the policy should be adjusted immediately to minimize the risk.

First, the Druckenmiller warns that in addition to the flood of liquidity, inflation in the United States has reached historically high levels, and usually at this stage, the Fed should plan to raise interest rates for the first time. However, the Fed told the market that the first rate hike would take place in 32 months' time.

In addition, Druckenmiller is worried about US debt. In his column, he said that the US federal government had increased its additional GDP deficit by 30 per cent in just two years, putting unprecedented pressure on the central bank in the coming decades, with almost 30 per cent of annual revenue having to be used to service interest on government debt over the next 20 years.

In Druckenmiller's view, the red flag has emerged, and foreign investors are selling Treasuries aggressively, which is shocking and unprecedented, even after spending trillions of dollars to prop up the bond market.

Druckenmiller believes that given all the risks and signs of a strong recovery, the Fed should adjust its policy immediately to minimize risks.

Then, on CNBC, Druckenmiller further stated that we are in a situation where all assets are "skyrocketing" and we have shifted a lot of related bets to commodities, interest rates and the dollar.

The Druckenmiller warns that, in the long run, the Fed's continued implementation of its policies, as well as the heavy debt and fiscal deficits they support, will threaten the dollar's global reserve position.

At the same time, Dario, founder of Bridgewater Associates, the world's largest hedge fund, warned that the Biden administration's economic plan increased the risk of inflation and the depreciation of the dollar, allowing too much money to flow into the economy, creating the risk of creating a bubble.

Dalio believes that the current valuation of the stock market is already a bubble, but it is not caused by debt, but because there is too much money in the market and monetary policy is not tightened, then the currency you hold will depreciate and have no choice but to allocate assets such as stocks.

The top five US tech giants tumbled 1.9 trillion after inflation fears rose again.

According to the latest data, the unseasonally adjusted CPI in the United States rose 4.2% in April from a year earlier, the highest since September 2008, and CPI rose 0.8% month-on-month after the quarterly adjustment, the highest in nearly a decade, both exceeding market expectations.

At a time when Druckenmiller, Dalio warned the Federal Reserve and the Biden administration's policies will further stimulate inflation, high-valued technology stocks have become the hardest hit by the collapse.

Among them, the five American technology giants FAAMG-Facebook, Apple Inc, Amazon.Com Inc, Microsoft Corp and Alphabet Inc-CL C's parent company Alphabet are particularly weak. Apple Inc has fallen more than 6 per cent since May, falling below the 200-day moving average for the first time since April 2020.

ETF ARKF, the only ETF ARKF owned by "bull queen" Cathie Wood, which owns Apple Inc's position, reduced its position in Apple Inc by 30 per cent, the second reduction since May.

In addition, Alphabet Inc-CL C, Facebook Inc, Amazon.Com Inc and Microsoft Corp were also very weak, with the total market value of FAAMG wiped $293.1 billion (1.8867 trillion yuan) since May.

Among them, Amazon.Com Inc has also been continuously reduced by its founder Bezos. Bezos has cashed out about $6.7 billion this month, according to US SEC documents.

Market analysts said that the resurgence of inflation expectations in the United States, the Fed monetary policy adjustment time window may be advanced, leading to a sell-off of high-valued technology stocks.

Notably, Treasury Secretary Yellen's favorite labor market indicator: JOLTS job openings surpassed 8.12 million in March, a record high, persistent supply chain disruptions and labor shortages that could further increase potential inflationary pressures.

Expectations of rising inflation led to a general fall in European and American government bonds. After the disclosure of CPI data on May 12 local time, the yield on 10-year US Treasuries soared, rising above 1.7% at one point, breaking through the key technical level of the 50-day moving average, and rising for five consecutive trading days, the longest straight rising cycle since March 19.

Yields on 30-year Treasuries rose as high as 4.5 basis points to 2.364%, and yields on long-term bonds rose significantly more than those on short-term bonds. Several investment banks had predicted that the yield on 10-year Treasuries could rise to 2% or more by the end of the year or next year as inflation picks up.

Wall Street analysts worry that inflationary pressures in the coming months could further push bond market yields higher, driving down highly valued technology stocks.

Goldman Sachs Group pointed out that compared with the Russell 1000 index, all five FAAMG stocks have above-average durations, which means they are particularly sensitive to fluctuations in long-term interest rates. When US bond yields soared between November 2020 and March this year, FAAMG rose a full 7 percentage points lower than the S & P 500. If there is a similar rise in US bond yields in the second quarter, FAAMG will be suppressed again.

When will the Fed raise interest rates? Goldman Sachs Group is still determined to sing more than FAAMG.

The worry about inflation is actually the concern about the inflection point of the Fed's monetary policy, because inflation has always been an important reference for the Fed's monetary policy.

But judging from the signals from the Federal Reserve, the time to raise interest rates is still a long way off. Fed governor Brainard, who has permanent FOMC voting rights, said there was good reason to think that the rise in inflation was temporary and that inflation expectations were still well anchored at 2 per cent. Several other officials have also hinted that the Fed is in no hurry to adjust its current ultra-loose monetary policy.

For the current weak technology stocks, Goldman Sachs Group's chief stock strategist David Kostin is still confident that FAAMG will make a comeback.

In its latest report, Kostin gives three reasons to be bullish on FAAMG:

1. The most important reason why investors love FAAMG is the resilience of revenue growth. After a 21% growth in 2020, total revenue in the first quarter of 2021 reached $321 billion, 8% higher than market expectations and 41% higher than the same period last year.

2. The most distinctive feature of FAAMG's business model is not revenue growth, but the amount and proportion of operating cash flow that they use to drive growth.

Over the past year, five FAAMG stocks have spent a total of $128 billion on research and development and $104 billion on capital expenditure, accounting for 22% of the S & P 500. In the past three years, the growth investment proportion of FAAMG is 64%, while that of general stocks is 11%. There is still room for imagination for future growth.

But Goldman Sachs Group also warned of the current valuation risks of FAAMG, which currently trades at 29 times forward earnings, while the remaining 495 stocks in the S & P 500 trade at 21 times forward earnings, with a 34 per cent premium over the 3/4 period since 1980.

Goldman Sachs Group pointed out that the high price-to-earnings ratio of FAAMG shares is mainly due to the current low interest rates and expected rapid growth. The difference between FAAMG's current price yield (Eamp P) and the 10-year Treasury yield is now 191bp, which is 144bp above the average of the past 40 years, suggesting that the value of these stocks remains attractive after adjusting for low interest rates. However, a rise in interest rates could adversely affect FAAMG's returns.

So whether the FAAMG can make a comeback depends largely on when the Fed starts to adjust monetary policy.