Well, I think it will be difficult to cut interest rates this year.

Well, I think it will be difficult to cut interest rates this year.

Fed Chair Jerome Powell has said that progress towards disinflation is slow, suggesting the possibility of a delayed rate cut this year. In fact, the cpi has not been coming down quickly before, and liquidity has been continuing to supply, so it seems to be a fixed result. "The growth and employment of the U.S. economy are solid, but inflation is showing slower progress than the Fed's target," Powell said at the economic forum the day before, adding that current high-interest policy should continue.

In fact, it suggests that there is no reason at all for the Fed to force a rate cut in the absence of progress in inflation. This comment pushed the 10-year Treasury yield to nearly 4.7%, and the expectation for a rate cut this year... well, the market still thinks it's possible up to two times, but so far, it doesn't seem very likely. The Fed Powell also seems to be able to change the rules on when and how many times it cuts

Wall Street investment banks' stance is changing. BofA lowered its forecast that only one rate cut would be possible at the end of this year, and Deutsche Bank followed suit. After all, the problem is inflation, but with oil prices continuing to rise, employment and consumption solid, there are high doubts about whether prices will fall. In fact, it is also true that doubts have now been amplified and are almost confirmed.

In fact, the consumer price index that will be released from now on is really important. In March, CPI rose 0.4% month-on-month, marking the second consecutive month of 0.4% increase. If these figures continue, prices will soar again to 4.8% year-on-year at the end of this year.

The market's current upward trend is around 0.2%, which gives us relief that the trend of disinflation is being maintained. The problem is that supercore inflation, the service indicator that the Fed is paying attention to, is showing a trend that easily exceeds 5% per year.

Fortunately, the unprecedented clash between Iran and Israel is stabilizing to some extent, but it is likely to be short-term. Already, both countries have been hit and the embers are strong. Oil prices are bound to remain under upward pressure as long as cuts in oil cartels, instability in the Middle East and global economic recovery continue.

Things have turned around that way and come back to a situation where reflation trades are benefiting. It's a market where raw materials and energy are strong. We still see the bull market holding up, but we're still not sure if it's time to buy low. We'll see.