The Fed's timetable for raising interest rates-the form is greater than the substance?

Xu Chi, a strategic analyst between China and ThailandIt is believed that after the Fed's interest rate meeting, the market generally believed that the hawks exceeded expectations, which triggered global market volatility. This time, the hawk of the Fed is that "form is greater than substance", that is, the hawkish expectation of raising interest rates twice as far away as the end of 2023, butThe market is most concerned about how to reduce the scale of bond purchases in the second half of this year, but it is vague.. At the same time, the distant timetable given by the Fed for raising interest rates is likely to change again at its rate-setting meeting in the second half of this year.

First of all, the reason why the Fed made the above-mentioned statement that "form is greater than substance" is that what was mentioned in the previous Sino-Thai team discussion is based on the short-term high inflation data from April to May. Recent domestic responses to inflationary political pressure and public opinion pressure, such as: recentRepublicans call inflation an exploitation of the American middle classAnd repeatedly hyped it as the most important issue to attack Biden's economic policy in next year's mid-term elections.

However, the most important driver of this round of US inflation is: under the financial subsidy, the middle and low income groups are more willing to spend and work, resulting in a mismatch between production and demand. Considering that after the beginning of JulyMore than half of the states in the United States will face suspension of financial subsidies(financial subsidies in all states will be suspended after September.) after the suspension of financial subsidies, the pace of the "shift" of the US economy will be an important variable affecting the US economy, inflation and overseas markets in the second half of the year.

Specifically, although in the medium-and long-term dimensions (more than a year), the suspension of financial subsidies helps to promote the return of low-and middle-income classes to work, and the recovery of US industrial production and economy. However, in the short term (one quarter to half a year), the impact of inertia in human nature should not be underestimated: after enjoying a high consumption without work for more than a year, just as people who do not exercise for a long time are suddenly required to exercise every day, it will arouse strong instinctive resistance. Therefore, when US financial subsidies began to be suspended in early July, it was very difficult for low-and middle-income Americans to get to work immediately, and they were more likely to passReduce consumption, consume savings, to "endure".

Measure and calculate.The current 1.9 trillion fiscal subsidy has increased personal consumption expenditure by about $300 billion, and its cancellation may affect the growth rate of personal consumption in the United States by 2%.. In other words, at least in the third quarter of the massive suspension of fiscal subsidies, the United States is likely to show that the recovery of industrial production is slower than the decline in household consumption. Accordingly, the US inflation data may also decline to a certain extent, and at this time the public opinion and political pressure on inflation in the United States may also ease.

On this basis, considering that the United States will enter the new fiscal year after October. The Biden administration can restart the "summary procedure" of the Senate's simple majority to pass the infrastructure bill. With the rise in government bond issuance and financing demand under infrastructure projects, and the easing of inflationary pressure from public opinion, there is still a possibility of great variables in the current "timetable" for raising interest rates at the end of next year at the Fed's interest rate meeting in the second half of the year.

In terms of whether long-term inflation in the United States is likely to get out of control under fiscal monetization.Over the past 20 years, the maintenance of low inflation in the United States mainly depends on the fact that under globalization, the United States imports a large number of cheap manufactured goods from developing countries.This not only maintains the low prices of consumer goods in the United States, but also controls the rate of wage increases in the United States. At present, with the acceleration of aging in China, rising labor costs, and intensified economic and trade frictions between China and the United States, the future long-term inflation in the United States may depend on the epidemic situation and the recovery speed of the supply chain in developing economies such as India and Southeast Asia, which in turn depends on the rate of mRNA vaccination in the above-mentioned economies. If these developing economies can be vaccinated on a large scale and form mass immunity next year, there is no need to worry too much about the risk of runaway long-term inflation in the US.

Li Qianyun, financial engineering analyst between China and ThailandIt is believed that, judging from the latest Fed decision, raising interest rates twice in 2023 is not a new expectation, but at most the first official statement of market expectations. So the market performance after the Fed's decision is more of a short-term emotional shock. Similar to the late 2008 financial crisis, before the Fed tightened substantially,Adopt the principle of "full communication and transparency of action". Therefore, although the change in the bitmap of interest rate increases can be a tightening signal ahead of the release of non-farm data, frequent policy expectation management will actually continue to increase market volatility.

In addition to expectation management, the actual policy dynamics of the Fed is still a "data standard", and the Fed has a high tolerance for inflation in the short and medium term.Focus on hard indicators such as unemployment rate and non-farm employment.. As early as the first half of 2016, abnormal fluctuations in non-farm payrolls led the Fed to reconsider the pace of its rate hikes. Non-farm data will be the next top priority affecting market tightening expectations. The Fed is expected to shrink its schedule and raise interest rates later than the market had expected.The Fed shrank at least after the second half of the third quarter, while the first rate hike was later than the first quarter of 2022.

Li XunleiIt is believed that this interest rate meeting of the Federal Reserve, regardless of recent measures, has only given an interest rate hike twice by the end of 2023."forward contract" is more like an expected guide.. That is, what has not been done, but the market has fallen accordingly. At present, the inflationary surge phase is basically coming to an end. If inflation starts to fall significantly from next year, and economic growth is also falling at the same time, is it necessary to cut interest rates?

This roundThe expansion of monetary and fiscal policies in the United States cannot be recovered.The contraction process of 2013-2018 is not expected to be repeated. In the past, the Fed usually chose to raise interest rates when the economy was in good shape, or even when it had a high fever. Nowadays, there is not even a low fever, so the market is overreacting.

Will the dollar index strengthen or weaken?

Chen Xing, chief executive of Sino-Thai MacroIt is believed that the trend of the US dollar may tend to rise in the second half of the year. Previously, the renminbi continued to rise against the dollar, but the appreciation moderated after the central bank publicly maintained its exchange rate target.

With the gradual lifting of the restrictions on economic constraints imposed by the epidemic in the United States, the Fed's interest rate meeting also began to change its tone: on the one hand, the judgment on inflation has changed, although it still insists that the inflation factor is temporary in the long run. but also admit that it may last longer than expected. On the other hand, from the situation reflected by the bitmap, the expectation of raising interest rates is also ahead of schedule. Although this does not correspond to the actual path of raising interest rates, it reflects thatThe advance of the tightening time of US Monetary Policy. When the Taper signal is released, the impact on the market is the most significant, and the dollar still has room to rise in the short term.

From a medium-to long-term perspective, the dollar index may still be strong. If we divide the trend of the dollar index since the 1980s according to the term of office of the president of the United States, we will find thatDuring the Republican administration, most of the dollar index centers tended to fall, while during the Democratic administration, the dollar index centers often moved up.. This may be related to the different ruling ideas of the two parties. In order to attract and unite international allies, the Democratic government is bound to strengthen the credit of the United States, and then has the willingness to maintain the strength of the dollar.

In the short term, in order to deal with the epidemic, the Biden administration has to tolerate the flood of dollar liquidity temporarily, but after the crisis, it is likely that it will maintain the credit of the dollar like previous Democratic presidents during its administration. In addition, although according to the comparison of economic strength, the appreciation trend of the RMB against the US dollar is clear over a longer-term time span, this process is likely to not be achieved overnight.The maintenance of the core interests of its financial hegemony by the United States depends on the credit of the US dollar, and the possible countermeasure from the United States can not be ignored.

During the Democratic Party's administration, the dollar index was strong:Source: wind, China-Thailand Securities Research Institute

Tang Jun, Chief Financial Engineering of China and ThailandIt is also believed that the dollar index will be strong. But at the same time, the probability of RMB appreciation is greater. The dollar index may be strong in the future, because inIn the dollar index, the combined weight of euro and pound is more than 60%, while Europe's debt problems after the epidemic may be more serious.Its ability to cope with all kinds of uncertainty is also weaker than that of the United States. China's monetary easing during the epidemic is relatively restrained, and since 2017, it has begun to stabilize leverage, reduce leverage, and take the lead in epidemic prevention and control capabilities and vaccination speed, so the RMB is more likely to appreciate.

Chen long, a strategic analyst between China and ThailandIt is believed that the market expects the Fed's marginal tightening liquidity to strengthen and the dollar index to strengthen. Although the Fed's interest rate meeting in June did not mention the market's focus on reducing the size of asset purchases, it sent out hawkish signals, including a sharp increase in the full-year GDP growth forecast to 7 per cent and a sharp increase in core PCE to 3 per cent (although it still insists that it is temporary inflation, but feels that inflation lasts longer than expected), fully reflecting the Fed's confidence in the economic recovery. As far as this point is concerned, it is in line with market expectations. At the same time, the market believes that the next interest rate meeting may focus on asset reduction. If the Fed's "action" meets market expectations,Then a stronger dollar index and weaker commodities will be a high probability event.。

Xiao Yu, an analyst at Sino-Thai fixed income.It is believed that on the exchange rate side, unless the overnight index swaps (OIS), which reflect the expectation of raising interest rates, rise significantly, the release of Taper signals is not enough to promote the upward trend of the dollar index and is expected to maintain strong volatility during the year.

Li QianyunIt is believed that affected by the Fed's decision, the dollar may remain strong in the short term, but is unlikely to last in the long term. In November 2018, the Federal Reserve began to release the Financial Stability report, a comprehensive assessment of the so-called "financial fragility", which has become the third pillar of the Fed's policy objectives after employment and inflation. With the changes in the global trade and financial pattern, macro variables have become more complex. Financial market fluctuations, exchange rates, trade, tax rates and other factors will have an impact on the medium-and long-term position of the Federal Reserve. The US dollar and RMB will maintain two-way fluctuations in the medium and long term, which needs to be judged according to the development of the market.

Li XunleiIt is believed that, for a government, it is generally the easiest thing to do first. Assuming that the dollar index continues to strengthen, the size of federal bond issuance will continue to expand, resulting in a decline in the proportion of US bond purchases by overseas governments and institutional investors, and the Fed will have to adopt a policy of quantitative leniency again and monetize the fiscal deficit. Therefore, it is unlikely that the dollar index will continue to strengthen.There may be two-way fluctuations in the future.。

What is the foregone conclusion of the commodity decline?

Zhou Yue, chief of Sino-Thai fixed incomeIt is believed that the Fed's FOMC meeting in June did not exceed expectations, and the change in the new content is mainly to pave the way for the Fed to start discussing taper from August to September. With the further recovery of the US economy and job market in the future, the trend of US monetary policy tightening is higher, which is mainly reflected in the strengthening of the US dollar index and the rise of US bond yields.A stronger dollar index could lead to a fall in commodity prices. On the one hand, the dollar is the marked currency for commodities, and a rise in the dollar index will increase the purchasing power of the dollar. On the other hand, a stronger dollar means that the dollar is more attractive, triggering a switch between the dollar and commodities, causing some money to flow out of the commodity market. On the domestic side, recently, under the influence of relevant policies, domestic commodity prices have fallen somewhat, to a certain extent, releasing the domestic transmission pressure of overseas commodity prices falling in the future. At presentThe spread between Sino-US interest rates on 10-year Treasuries is about 170BP, and the upward rise in US bond yields will not put much pressure on the domestic bond market in the future.. However, as the marginal liquidity of the dollar tightens, attention needs to be paid to the possible impact of capital outflows on the equity market.

Tang JunIt is believed that as both Europe and the United States tend to shift to "big government" (that is, to increase the role of government in the economy), stimulating the economy and employment may become a more important goal for global central banks, and the independence of the Federal Reserve may also be more questioned. Scarce core assets will continue to be sought after under the unanimous expectation that the purchasing power of the world's major currencies will decline.

The relative concentration of supply in commodities ((such as copper, iron ore, etc.), its resources and investment products have stronger attributes., while the varieties with scattered supply and sufficient competition have stronger consumption attribute. With the high concentration of global capital to the giants, most of the resource goods are increasingly concentrated to the international capital giants through a large number of acquisitions, so in the futureThe investment attributes of many types of commodities will become stronger and stronger, which will benefit more obviously from the overissuance of global currencies.Li QianyunOn the other hand, it is believed that commodities represented by crude oil still have room to rise in the short term. Due to the judgment of medium-and long-term exceeding expectations of inflationPrecious metals are good in the medium to long term and can be bought at a bargain.。

Will the yield on 10-year US Treasuries break 2%?

Xiao Yu, an analyst at Sino-Thai fixed income.It is believed that the information on the reduction of bond purchases (Taper) in the Fed's interest rate meeting in June is limited, but the bitmap shows that the committee is expected to raise interest rates further ahead of schedule, thus triggering a strong market reaction: the dollar index rebounded sharply and commodity prices fell. With the sharp increase in economic expectations, the marginal tightening trend of the Fed's monetary policy has been established.However, the pace of future interest rate increases is still uncertain, and we need to focus on the impact of Taper during the year.Taper as a landmark event of monetary policy from loosening to tighteningFrom the historical experience of 2013, the influence process can be divided into three stages: discussing the announcement and implementation of → release signal →.. In the discussion stage (2013.2.15-5.21), the dollar index rebounded slightly and US bond yields remained weak and volatile; in the signal stage (2013.5.22-2013.12.17), the dollar index volatility weakened and US bond yields rose rapidly; in the announcement phase (2013.12.18-October 2014), the dollar index gradually rebounded and US bond yields fell.

The trend of US debt and Dollar Index during the contraction of QE in 2013

Considering the two major policy objectives of inflation and employment, we are currently in the stage of Taper discussion.The Fed may issue a clear Taper signal in the third quarter of this year, which will be formally implemented at the end of the year or early next year.. Compared with 2013, the Fed has communicated better with the market since the epidemic, and investors have more expectations for Taper "panic" after the last round of learning effects, so if the Fed sends out Taper signals in the future, the market shock may be more mild.

Specifically, 10Y Treasuries benefited in the short term from the abundant liquidity caused by the decline in the TGA cash balance, and the expected yield remained volatile. After the release of the Taper signal, assuming that real interest rates rose 100BP as in 2013, inflation expectations fell back to pre-epidemic levels.10Y Treasuries, based on real interest rates superimposed by inflation expectations, are around 2%.

Changes in real interest rates and inflation expectations corresponding to 10Y Treasury yields (%)

Zhou YueIt is also believed that with the tightening of monetary policy in the future, the inflation expectation of US debt will gradually decline, but the real interest rate will rise.Us bond yields will come under upward pressure in the second half of the year.

Labor shortage and consumption overdraft:Us economic recovery slows, inflation may slow down

Zhang Wenyu, a strategic analyst between China and ThailandIt is believed that the announcement on June 11 that CPI in the United States rose 4.9% in May from a year earlier, exceeding the expected 4.7%, did not trigger a correction in US stocks, but a rise in the technology sector represented by NASDAQ. The reason may be that the Fed's expectation management of "temporary inflation" is beginning to be absorbed by more investors, market concerns about persistently high inflation and monetary tightening are beginning to blunt, and there is also evidence of short-term support for high inflation.

First of all, in the data disassembly of high inflation in the United States in May, we can find that the price of used cars, transportation services and other short-term seasonal travel services were affected by last year's low base, which continued to promote the rise of CPI from April to May.Housing services and medical services, which represent the medium-and long-term price levels, began to weaken.. Housing-related prices rose 0.3% month-on-month in May, down from 0.4% in April, while medical service-related prices were-0.1% month-on-month.

Secondly, for the job market: 1) the labor shortage in the US job market is still restricting the rapid recovery of the production side. The U.S. employment data for May was lower than expected. Non-farm payrolls in the United States increased by 559000 in May, with an expected increase of 675000. At the same time, the phenomenon of labor shortage is also increasing, with the vacancy rate in the United States rising from 3.8% at the beginning of the year to 6% in April.The vacancy rate for accommodation and catering services was 10.8 per cent and 6.7 per cent for the manufacturing sector.

Labor shortage: job vacancy rates in the United States are rising

2) the repair of the balance sheet of US residents during the epidemic, especially the increase in unemployment benefits, supported a strong recovery in demand for US residents. Compared with the average 3% growth rate of retail sales over the past decade, retail sales grew by 15% after April 2020, and high unemployment benefits have partly "overdrawn" consumption. In fact, total US retail and food service sales began to fall in May, growing at-1.35 per cent month-on-month.

On June 12, 25 states in the United States announced plans to abolish unemployment benefits, and July 10 was the last deadline for 21 other states to abolish unemployment benefits.. The disappearance of high income caused by unemployment benefits cannot support the sustained growth of household consumption, but the high savings during the epidemic will maintain a low willingness to work. For example, the average weekly unemployment benefit in Mississippi is $330, plus federal subsidies, and the unemployed receive about $630 a week.The annual subsidy income is about twice the minimum wage in the United States.。

That is to say,The recovery of the American economy is pulled by the current situation of labor shortage and consumption overdraft in the United States.Or it means that the United States faces both a slow recovery on the production side and a faster weakening on the consumer side in the third quarter. After the high level of US inflation in the second quarter, the level of inflation may be released slowly, and inflation may be within the expected level of the Federal Reserve for the whole year.

Tang JunIt is believed that there are many reasons for global inflation. Previously, the market generally interpreted the reason for the rise in commodity prices as that the recovery of the epidemic in developing countries (resource suppliers) lags behind that of Europe and the United States. In addition, we believe that there are a number of factors that may have boosted global prices.

First of all, the tightening of global environmental policies under the carbon neutralization target may affect the supply of resource products. For example, China's restrictions on energy-intensive industries, Chile's introduction of copper mineral resources tax bill and so on. Secondly, after the impact of the epidemic, governments' intervention in the supply chain in order to reduce external dependence will directly push up procurement costs and cause damage to the global supply chain, thus affecting supply; on the other hand, various policies to attract manufacturing return will stimulate manufacturing investment and form short-term demand. Third, heavy subsidies during the epidemic have led to a decline in the debt ratio of US households, and consumer demand may rebound more than expected. In addition, he mentioned at the seminar last weekThe pull of overseas real estate boom on aggregate demand may also exceed expectations.

There will be marginal changes in US monetary policy under inflationary pressures, but it is difficult to really return to normal. If inflation rises higher than expected, Fed easing may weaken marginally, but it will be difficult to really return to normal, and monetary policy will remain loose and interest rates low for a long time. Since the Federal Reserve quantitative easing in 2009, the United States has been in a low interest rate environment for a long time, and enterprises and capital markets are highly dependent on the low interest rate environment.If interest rates rise more, it will have a significant impact on the capital markets and the US economy.. It is very difficult to get used to a good life and return to a hard life. Under the current situation of political polarization and social division in the United States, the US government does not have the motivation and ability to live a short-term hard life in order to solve long-term problems.

In addition, China's proposal of "internal and external circulation" and the transition to consumption-led economy may no longer deliberately pursue the increase of trade surplus and foreign exchange reserves, which may also be a factor contributing to the appreciation of the renminbi. Purchasing power parity between developing and developed countries has not been established for a long time, which may be due to the unequal status of currencies. Developing countries need to reserve currencies with international purchasing power, such as US dollars and euros, thus creating additional demand for these strong currencies. With the improvement of the international status of RMB, andChina no longer deliberately pursues the increase of foreign reservesThe exchange rate of the RMB against the US dollar and the euro may move closer to purchasing power parity.

Li QianyunThe forecast for US inflation is that CPI growth slowed in June, medium-term inflation exceeded expectations, and long-term inflation is still obviously subject to macroeconomic conditions. In the short term, a monthly forecasting model is built based on US food prices, energy prices, import prices, wages and house prices.Us CPI is forecast to be around 4.3% in JuneAlthough the absolute value is large, it is slower than the rapid growth in May.

In the medium term, refer to the inflation autocorrelation model in the Fed report.It is predicted that in the next 12 months, PCE will stabilize around 2.3%, and core PCE will stabilize around 2.0%.. This may be one of the basis for the Fed's judgment that inflation "has little upside risk and reflects what the Fed wants to achieve".

Us Core PCE trend Forecast:

The relationship between the total market capitalization and M2 balance of American listed companies:

However, it is worth noting that the autocorrelation forecasting models of inflation usually imply the premise that the exogenous variables remain unchanged. But in fact, compared with the global "debt-deflation" cycle of the past decade, some medium-term variables may change. The decline in the controllability of inflation since 2008 is mainly due to the decoupling of inflation from currency and employment.

Among them, the decoupling of inflation and money is mainly due to the decrease in the controllability of money multiplier and currency velocity: insufficient aggregate demand caused by rising savings rate and income differentiation, and currency turnover is increasingly shown as the conversion between bank accounts or financial assets. rather than changes in actual expenditure, and the contraction of bank credit.The reason for the passivation of Phillips curve is that the improvement of low-end employment has a limited impact on wage transmission.Companies rely on productivity growth rather than higher output prices to absorb cost pressures, significantly weakening the transmission of wages to inflation, and the development of Chinese manufacturing makes the United States enjoy low-cost dividends.

The key factor in whether inflation can return to monetization in the medium term is the spending of individuals and businesses, as well as the activity of bank credit. Since 2008, Bank of America Corporation's reserve ratio has risen sharply from 1.3 per cent before the crisis to as high as 27 per cent, while the Fed has strictly regulated banks and raised credit standards, limiting the ability to expand credit. However, the state of monetary repression in the United States has actually shown signs of reversal since the end of 2014, but the trend is not sustained and obvious.

Recent research by the New York Fed shows that:The expectation of US households for the growth rate of spending in the coming year rises to 4.2%It reached the highest level in more than five years. In the later stage of the epidemic, if the US economy recovers strongly, personal income and corporate profits grow, and infrastructure plans are carried out in an orderly manner, the flow rate of money is likely to rise compared with that before the epidemic. Rising economic demand and the Fed shrinking its schedule without raising interest rates are also conducive to credit expansion.The return of the dollar and inflation expectations will also form positive feedback, contributing to higher-than-expected inflation in the medium term.

In the long run, even if the Fed does not raise interest ratesThe medium-and long-term problem of insufficient effective demand will eventually restrict the performance of inflation. Aging population, high debt ratio and rising income inequality are still the main problems facing us for a long time.. Other structural constraints include the possibility that capital markets could still attract money away from physical assets, a rising household savings rate and higher export prices in China.

Global stock market volatility increases: the upward trend of US stocks is still in progress.

Chen longIt is believed that global assets will enter a period of big volatility in the second half of the year, the core reason is that market expectations of marginal tightening of global liquidity will repeat in the context of repeated outbreaks, that is, the Fed's "behavior" may become uncertain. Recently, the global epidemic situation has been repeated again. COVID-19 epidemic situation, such as British mutated virus strain and Indian mutated virus strain, continues to spread around the world, and China is also caught in it. Through grass-roots research, it is found that due to the recent epidemic in Guangdong, China's economy has been generally affected, the cost of commercial activities has increased, import and export expectations have declined, and so on. Although there are global inactivated vaccines, mRNA vaccines and so on, there are still big loopholes in the role of cutting off the epidemic. It cannot be ruled out that there will be new mutants that will make the current vaccine ineffective.The probability of further stagnation or even recession caused by the spread of the global epidemic is still not low.

In the second half of the year, the market will repeat liquidity expectations, which may exceed or fall short of expectations. Therefore, the volatility of the equity market will increase in the second half of the year, the market situation is still structural, β opportunities are difficult to grasp, and it is suggested that more attention should be paid to α (that is, the market in the second half of the year is more suitable for bottom-up selection of individual stocks). In areas where alpha may exceed expectations, we think it is concentrated in manufacturing and consumer goods. IncludeNew energy and new energy vehicles, technology manufacturing (semiconductors, Hongmeng, consumer electronics), food and beverage, medicine and so on.

In the short term, the centenary of the founding of the Party is about to be ushered in. From the observation of historical statistics, there are obvious excess returns in the national defense industry, and the short-term β attribute of the market is high, and the leading securities firms are also worthy of attention in the short term.

Zhang WenyuIt is believed that compared with the rapid economic recovery in the first quarter, the pace of US economic recovery slowed in the third quarter, and apart from expected management, the Federal Reserve may remain "on hold" in the third quarter. In terms of market investment style, traditional value stocks that benefited from the rapid economic recovery in the first quarterIt will switch to the positive growth technology sector under the slow economic recovery and weakening long-term interest rate shocks.

Zhou YueIt is believed that the liquidity contraction of the US dollar may also impact the performance of emerging market equity assets. The abundant US dollar liquidity in the early stage has led to a large influx of funds into overseas markets. After the cost of capital has risen, the required rate of return of overseas funds has increased accordingly, which may affect emerging market equity markets that have benefited from the spillover of US dollar liquidity.

Li QianyunIt is believed that, from the historical law of US stocks, although the expected increase in interest rates has caused the stock market to encounter selling pressure under the influence of liquidity, the stock market will stabilize and rebound after the rate increase due to the reconfirmation of the economic upside.

Tang JunIt is believed that the stock market will still face volatility, but the general trend is still upward. Looking at the monthly K chart of the S & P 500 or NASDAQ, US stocks have rarely adjusted longer than six months since the Fed's quantitative easing in 2009, and the general trend has been all the way up. More recently, the US stock index has risen all the way since the Federal Reserve announced unlimited QE on March 23, 2020. Although the COVID-19 epidemic in many countries worsened repeatedly during this period, it seems to have little impact on US stocks. therefore,The rise in the mainstream index of US stocks may be more of a monetary phenomenon.