Kaohoon Morning Brief – 24 January 2022

1) Goldman says more than four rate hikes is possible

Goldman Sachs expected the U.S. Federal Reserve (Fed) to raise interest rates four times this year (March, June, September, and December) on its baseline forecast, however, due to the current situation of surging inflation, the American multinational investment bank noted that it is possible for the central bank to consider more hikes.

The Fed will kick off its two-day meeting this Tuesday.


2) IMF says China’s zero-Covid policy negatively impact economic recovery

The International Monetary Fund’s managing director said that China’s zero-Covid policy, though effective at first in curbing Covid-19 spreading, looks like a burden that has a negative impact on the economic recovery of Beijing itself as well as the rest of the world.

China is appointed to hold the 2022 Winter Olympics from 4 – 20 February.


3) China’s central bank cuts 14-day reverse repo rate by 10 bps

The People’s Bank of China (PBOC) cut the funding cost of 14-day reverse repos by 10 basis points  from 2.35% to 2.25% when injecting 150 billion yuan ($23.68 billion) via the liquidity tool into the banking system on Monday.


4) 10-year bond yield slows down from 2-year high

U.S. 10-year Treasury yields retreated to 1.77% on Monday after reaching its two-year high of 1.87% last week that caused a withdrawal from traders in the stock market. Still, the 10-year bond yield is trading at a high level. Meanwhile, the 30-year bond yield rose to 2.088% and the 2-year bond yield rose to 1.0302%.