Matthew Morgan提到，若美国就业市场恶化，令投资者对消费者开支和工资的担忧日益增加，则可能会推演到经济Jupiter Asset Management indicates that short-term interest rate fluctuations are not a major concern; the most important factor is the speed of inflation decline. If the decline is rapid enough, it will create a favorable investment environment for Bonds.
According to Zhitong Finance APP, the Federal Reserve has cut interest rates in three consecutive meetings, totaling a 1% reduction. Jupiter Asset Management points out that short-term interest rate fluctuations are not very concerning; the most important factor is the speed of inflation decline, which if fast enough, will benefit the Bonds investment environment. Matthew Morgan, the Bond Investment Director at Jupiter Asset Management, mentioned that the reason for not being concerned about the extent of rate cuts is due to inflation issues. He indicated that it is evidently a world where inflation is continuously slowing down, and this trend is also seen in Europe and America, with downward pressure on inflation likely to persist.
He believes that the biggest problem currently lies in the neutral interest rate; the lower the neutral interest rate, the greater the yield obtained from government bonds. Moreover, there is almost no consensus in the market regarding the definition of the neutral interest rate. In the current dot plot of the Fed's interest rates, some officials believe that the neutral interest rate is below 2.5%, while others expect it to reach 4%, making the situation quite interesting.
Matthew Morgan mentioned that if the employment market in the USA worsens, leading to increasing concerns among investors regarding Consumer spending and wages, it could have implications for the economy.hard landingIn that scenario, there is also a possibility that interest rates could drop significantly, allowing for profits from government bonds.
Matthew Morgan emphasized that what the market needs to focus on right now is the employment data. In fact, Fed Chairman Powell has also stated that authorities should shift their focus from inflation to the employment market, but the situation in the employment market is actually quite unstable. The Shaman Law has been triggered, which does not necessarily mean that the economy will decline, but history often shows similar trends, so the market must take it seriously. Employment data clearly indicates that the labor market is worsening, and historically, when the employment market begins to deteriorate, an economic hard landing often follows.
In terms of the stock market, he pointed out that in the past, when the USA initiated interest rate cuts, the stock market trend often worsened after a period of time. Historically, the Federal Reserve has almost always maintained tightening for too long and then started cutting rates too late. Although it ultimately succeeded in curbing inflation, it often led to economic recession. At this stage, it cannot be determined whether a similar situation will occur again, as history does not necessarily repeat itself.
