The yield of US Treasury bonds has soared, and the yield of 10-year Treasury bonds has soared by more than 100 basis points in four months, which is now approaching the psychological threshold of 5%. This is a rare scene since the global financial crisis in 2008. The economic policy pursued by Trump after his return to the White House further pushed up the demand for loans. Its growth-oriented policy direction, including tax cuts and deregulation, has worried the market about the risks brought by soaring government debt. Kathy Jones, chief fixed income strategist of Charles Schwab & Co Inc, said in an interview with Bloomberg on Friday: In addition to monetary policy, fiscal policy has become an important factor affecting the bond market. The Trump administration's policies such as tax cuts and increased infrastructure spending may further expand the fiscal deficit, causing investors to worry about the sustainability of US debt. The "bond market police" has once again become the focus of discussion. Albert Edwards, global strategist at Societe Generale, said: 4.5% is just the beginning? Analyst: The era of high interest rates will be fully opened. Peters of PGIM Fixed Income said that if the 10-year yield rose above 5% in this environment, he "wouldn't be completely shocked". JPMorgan Chase pointed out that factors such as de-globalization, aging population and increased expenditure on climate change will push the yield of 10-year treasury bonds to remain above 4.5% for a long time. Bank of America believes that the bond market has entered the third "big bear market" in 240 years. "The steepening of the curve is also more in line with the historical relationship between the huge deficit and the rising deficit." In any case, this wave of adjustment in the global bond market has profoundly changed the investment environment. For investors and policy makers, adapting to the new normal may be the only option at present. The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

In the past few years, Chinese fast food restaurants opened on the first floor of office buildings and major shopping malls are becoming canteens for many migrant workers, and Hometown Chicken is one of them. Recently, LXJ International Holdings Limited, the holding company of Anhui Laoxiang Chicken Catering Co., Ltd., submitted a prospectus to the Hong Kong Stock Exchange, intending to be listed on the main board of the Hong Kong Stock Exchange, with CICC and haitong international as co-sponsors. Nowadays, the hometown chicken with thousands of stores has a relatively grassroots entrepreneurial story. The earliest story has to start from forty years ago. In 1982, 20-year-old Shu Congxuan retired and returned to his hometown of Feixi County, Hefei, Anhui Province, and began to invest in chicken raising. After raising chickens for 20 years, combined with the delicious Feixi old hen soup from his hometown, Shu Congxuan began to enter the catering industry, focusing on his own chickens. And this Feixi old hen soup is still the signature item of old country chicken today. In 2003, the first store of Feixi Old Chicken, the predecessor of the hometown family, opened in Shucheng Road, Hefei; Eight years later, it has grown into a hundred-store brand in Anhui. But the old country chicken is not satisfied with this. In 2012, with the tide of rising restaurant chain rate in China, "Feixi old hen" also planned to go out of Anhui and officially changed its name to "hometown chicken". Since then, the stores of Laoxiang Chicken have spread all over East China, and they started to join in 2020. It was the opening and expansion of Zhang Zhilu that made the stores grow even faster. According to the data published in the prospectus, as of September 30, 2024, Laoxiang Chicken had 1,404 stores in 53 cities in China, including 949 direct stores and 455 franchise stores, serving more than 189 million customers. At the key point of capitalization, Laoxiang Chicken has a bigger story, namely "the biggest Chinese fast food brand in China". If we only look at the transaction volume, its transaction volume in 2023 will reach 6.2 billion, which really ranks first in the Chinese fast food industry in China. From its financial point of view, its volume is not small. In terms of revenue, in 2022, 2023 and the first three quarters of 2024, the revenue of Laoxiang Chicken was 4.528 billion yuan, 5.651 billion yuan and 4.678 billion yuan respectively; In terms of net profit, the net profit of the above three periods was 252 million yuan, 375 million yuan and 367 million yuan respectively. Moreover, as a thousand-store brand from chicken breeding, its prospectus shows that Laoxiang Chicken has three chicken farms in Anhui with a total area of about 920,700 square meters, two central kitchens in Hefei and Shanghai, and eight distribution centers that support the operation of restaurants. Although it has been regarded as the seed player of Chinese fast food track in the past two years, there are still many hidden concerns about its performance. First of all, from the perspective of growth rate, the growth rate of revenue and profit of Laoxiang Chicken has slowed down. In 2023, the revenue growth rate of hometown chicken was 24.80%, and in the first three quarters of this year, the growth rate was only in the early 10%; In terms of profit, the year-on-year increase in 2023 was 9%, and it dropped by 1 percentage point in the first three quarters of 2024. And such an increase, in the case of a single store, can only be regarded as a slight increase. In addition, starting from 2022, the hometown chicken, which has reached the scale of thousands of stores, began to plan IPO. However, three sprints to the A-share IPO ended in failure. During that time, various compliance problems in the operation of hometown chicken also surfaced. According to the inquiry of Shanghai Stock Exchange, the problem of hometown chicken is more than a half-star, involving 45 aspects, such as employee social security, food safety, leasing collective land, bribery of actual controllers, asset transfer and the reasons for the difference in gross profit margin with comparable companies. As a Chinese restaurant head brand with a valuation of about 18 billion yuan in the Pre-IPO round at that time, each of these problems is a fatal blow. So at the end of August, 2023, the hometown chicken, who had already arrived in front of the IPO, took the initiative to withdraw the A-share listing application, which also meant that the last sprint in the A-share market officially failed. Judging from the current situation, the old country chicken has not given up. This time, the hometown chicken responded that listing on the Hong Kong Stock Exchange would give it global recognition and provide the hometown chicken with direct access to overseas investors and foreign capital. The raised funds will be used to strengthen the integrated supply chain layout; Expand the store network to expand the geographical coverage and deepen market penetration; Improve information technology capabilities and upgrade intelligent equipment and digital systems. However, it is not easy for hometown chickens to switch to Hong Kong stocks. On the one hand, it is hard to say whether the matters inquired by the Shanghai Stock Exchange have been solved or will become a constraint when the above-mentioned A-shares are rushed. From the financial point of view, Laoxiang Chicken does not have the scenery of "the largest Chinese fast food brand in China". Among them, increasing income without increasing profit is its biggest contradiction. Hometown Chicken has more than 1,400 stores, and its profit in the first three quarters of this year was 367 million yuan. However, last year, there were less than 1,000 other Huizhou catering small vegetable gardens, but by August 31, 2024, the income for the eight months was 3.544 billion yuan, and the net profit was 400 million yuan, which was much higher than that of hometown chickens. In today's business world, there are many grassroots entrepreneurial stories, especially in the catering industry. However, when it comes to the key nodes of the capital market, all families also need more standardized management and more modern management methods. It seems that it is always difficult to get through the "declaration of illness" and "getting lucky". The previous sprint story of Laoxiang Chicken is the best example. Now that the IPO of Hong Kong stocks is under attack, the hometown chicken should learn from the previous lessons, and it is possible to realize the dream of IPO and become the "first Chinese fast food". Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

At present, Wall Street is full of arguments about the "bubble of US stocks". Howard Marks, a well-known investment guru, thinks that the valuation may be a little bubble but it doesn't seem crazy. On Tuesday, Howard Marks, the founder of Oak Capital, published a column in the Financial Times to explore whether the current US stock market has fallen into a bubble. Max thinks: Although the expected P/E ratio of the S&P 500 index is high, it is not crazy, at 23.6 times. I haven't heard people say "there is no unattainable price", and the market is not crazy in my opinion, although the price is high and there may be some bubbles. Marx pointed out in the article that the exact symbol of the bubble is irrational bubble thinking: Compared with the valuation parameters, the more effective way to judge the bubble is psychological diagnosis. The highly irrational prosperity-the complete worship of a group of companies or assets leads people to be extremely afraid of missing the opportunity to participate in the bubble, and firmly believe that these stocks "have no unattainable price", especially when the latter is the exact sign that the bubble is brewing. Max also said that bubbles are often related to "new things", and excessive optimism about new things will lead to pricing errors: Because bubble participants can't imagine any negative effects, they usually give a valuation of hypothetical success. In fact, only a few newcomers may flourish or even survive. An excellent newcomer may be replaced, and subversive may also be subverted. The following is the full text of the column: Nowadays, many investors are on high alert to asset price bubbles, fearing that past booms and busts will repeat themselves. Therefore, I am often asked whether there is a bubble around the few stocks that lead the Standard & Poor's 500 Index. The so-called "seven giants" of science and technology have dominated the index in recent years and contributed a disproportionate increase. You can identify bubbles by valuation parameters, but I always think psychological diagnosis is more effective. What I am looking for is a highly irrational prosperity-the complete worship of a group of companies or assets, which leads people to be extremely afraid of missing the opportunity to participate in the bubble and firmly believe that there is "no unattainable price" for these stocks. Especially when I hear the latter, I think it is a definite sign that a bubble is brewing. In short, bubbles are marked by bubble thinking. If bubble thinking is irrational, what makes investors deviate from rational thinking? The answer is simple: new things. This phenomenon depends on another time-honored investment motto "This time is different". Bubbles are always associated with new mistakes, from the Dutch enthusiasm for newly introduced tulips in the 1630 s to the Internet and telecommunications stocks in the late 1990 s. Since there are no historical indicators to measure the proper valuation of new things, nothing can anchor them on a solid foundation. All the bubbles I have experienced involve innovation, many of which are either overvalued or not fully understood. The attraction of new products or new business models is usually obvious, but the potential risks and loopholes are often hidden. A new company may completely surpass its predecessors, but investors often fail to realize that even a promising newcomer may be replaced, and disruptors may be subverted, whether by highly skilled competitors or updated technologies. In the 1990s, investors were convinced that "the Internet will change the world". It did seem so at the time, and this assumption led to a great increase in demand for everything related to the Internet. E-commerce stocks went public at a seemingly high price, and then tripled on the first day. There is usually a trace of truth behind every craze and bubble, but some of them are exaggerated. The Internet did change the world, but most Internet companies that soared in the bubble in the late 1990s were ultimately worthless. Excessive optimism about new things leads to wrong pricing. Because bubble participants can't imagine any downside risks, they often give a hypothetical successful valuation. In fact, only a few newcomers may thrive or even survive. Stocks are sold at multiples of the next year's earnings, reflecting the expectation that they will continue to make profits for many years to come. When you buy a stock, you buy the company's share of future annual income. When buying stocks at above-average P/E ratio, investors are paying for the company's profits in the coming decades, even considering the significant growth. Today, the companies leading the S&P 500 index are much better than the best companies in the past in many ways. They enjoy great technological advantages and scale, but their persistence is not easy to achieve, especially in high-tech fields that are easily subverted. In the bubble, investors treat leading companies as if they were sure to stay ahead for decades. Some did, some didn't, but change seems to be more common than persistence. Is the US stock market too high? It is extremely rare for the S&P 500 index to return 20% or more for two consecutive years. This has happened in the past two years. In 2023, the S&P 500 index rose by 24.2%, in 2024 it rose by 23.3%, and now we are in 2025. What will happen in the future? Today's warning signs include the optimism that has prevailed in the market since the end of 2022, the enthusiasm for the new thing of artificial intelligence, and the assumption that the top seven companies will continue to succeed. On the other hand, although the expected P/E ratio of the S&P 500 index is high, it is not crazy, at 23.6 times. I haven't heard people say "there is no unattainable price", and the market is not crazy in my opinion, although the price is high and there may be some bubbles. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Former Federal Reserve Chairman Alan Greenspan warned of "irrational exuberance" in 1996. Now Federal Reserve Governor Lisa Cook has come forward to warn that "the valuation of US stocks is too high", and it is very rare for Fed officials to directly warn the market risks. According to MarketWatch, on Monday, Federal Reserve Governor Lisa Cook issued a rare direct warning to the stock market. She said: Many asset classes are at high valuations, including the stock and corporate bond markets, and the risk premiums in these markets are expected to be close to the bottom of the historical distribution. This means that the market may be perfectly priced, so it is prone to a sharp decline, which may be caused by bad economic news or changes in investor sentiment. This remark is reminiscent of the "irrational prosperity" warning put forward by former Federal Reserve Chairman Alan Greenspan in 1996, but unlike Greenspan's remarks that immediately affected the stock market, Cook's warning seems to be ignored by the market. On the same day, the S&P 500 index stood at 6000 points again, which was close to a record high. Although the increase later narrowed, it still closed at 0.6%. Undeniably, measured by historical standards, the market valuation is indeed at a historical high from a number of indicators: According to Goldman Sachs, the ratio of the S&P 500 index to its book value and sales is two standard deviations higher than the average of the past 10 years. Economist Robert Shiller's cyclically adjusted price-earnings ratio (CAPE) is about 37, which is close to the highest level since the bursting of the Internet bubble. The Standard & Poor's 500 Index rose by at least 20% for the second year in a row last year. However, high valuation does not necessarily mean that the market is about to collapse. Just as Greenspan's warning occurred four years before the peak of the internet bubble, the high valuation state may last for a long time. Art Hogan, chief market strategist of B. Riley Wealth, said: Greenspan was not wrong, but he made the decision four years in advance, and since then officials seem to have been trying to avoid commenting on the valuation. At the same time, five of the 11 sectors of the S&P 500 index outperformed the broader market index at the end of 2024, indicating that the rally has begun to expand from the seven giants of science and technology. If this is the case, it may help alleviate valuation concerns. Almost every Wall Street strategist expects the stock market to rise. Even a few analysts who expect the stock market to fall, such as Barry Bannister of Stifel, say that besides valuation, other factors (such as economic deterioration) are needed to make the stock market pull back. At the same time, if the fundamentals begin to deteriorate, overvaluation may make the market fragile. Kevin Simpson, CEO of Capital Wealth Planning, said in a report on Monday: The fourth quarter earnings season will start next week, and we expect that (earnings) will become the focus. Investors will seek earnings growth to support the current valuation and analyze how the company responds to the Fed's interest rate cut. The market generally expects the growth rate of earnings per share to be close to 15% in 2025, which is more than twice the historical average. If the earnings season has any impact on expectations, especially those from large technology companies, it will aggravate people's concerns about valuation. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

The Fed's interest rate cut is slowing down, and the rise in gold prices is also slowing down? In their latest report, Goldman Sachs analysts Lina Thomas and Daan Struyven adjusted their gold price forecasts, pointing out that the slowdown of US monetary policy relaxation in 2025 will curb the demand for gold ETFs. Therefore, Goldman Sachs expects the gold price to reach $2,910 per ounce by the end of this year, instead of the previously expected $3,000 per ounce. Goldman Sachs also expects that as the Fed continues to cut interest rates, the price of gold will reach $3,000 per ounce in mid-2026. Considering that inflation in the United States will continue to decline, Goldman Sachs expects the Federal Reserve to cut interest rates by 75 basis points this year, which is lower than the previous forecast of 100 basis points-however, this is still more dovish than the current market pricing. Goldman Sachs pointed out that the inflow of gold ETF funds in December last year was lower than expected, mainly due to the reduced uncertainty after the US election, which also led to the low starting point of gold prices at the beginning of this year. Analysts said: "The weakening of speculative demand and the structural increase of the central bank offset each other, making the price of gold fluctuate within a range in recent months." Goldman Sachs analysts also stressed that the central bank's willingness to buy gold will continue to be a key driver of the long-term price of gold. It is estimated that by mid-2026, the average monthly gold purchase will remain at 38 tons. Previously, in mid-November, the Struyven team had issued a document predicting that the price of gold would rise to $3,000/ounce by the end of 2025. The structural driving factor for the price increase came from the central bank's demand, the cyclical driving factor came from the Fed's interest rate cut, and the main downside risks came from the upward interest rate and the strengthening of the US dollar. In 2024, the price of gold rose by 27%, hitting a record high. This wave of gains is supported by factors such as the relaxation of US monetary policy, the increasing demand for safe haven and the continuous purchase of gold by global central banks. However, since the beginning of November last year, the gold rally has slowed down, mainly due to the impact of Trump's victory in boosting the dollar. Recently, as Fed officials stressed the need to cut interest rates more cautiously this year to deal with inflation concerns, gold prices began to come under pressure. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Since the end of 2022, the S&P 500 index has risen by about 60%. Bank of America's indicator of tracking Wall Street's views on the US stock market is gradually approaching a "reverse sell" signal. Bank of America strategist Savita Subramanian and her team pointed out in a report to customers on Thursday: Bank of America's "Sell-Side Indicator SSI" rose by 33 basis points to 57% in December, the highest level since the beginning of 2022. The indicator is still in the "neutral" range, but it is only 1 percentage point away from triggering the "sell" signal. It should be noted that the last time SSI was so close to sending a "sell" signal was in February 2021, and then US stocks peaked 10 months later. This indicator has not declined for eight consecutive months, which is the longest continuous increase record since 2021. Subramanian also said: "Although more and more bullish voices will increase the risk of market complacency, our data show that bullish sentiment may remain at a high level for a long time before the bull market ends." SSI is a reverse indicator, which tracks the advice of Wall Street sellers' strategists on the average allocation ratio of stocks in balanced funds. When Wall Street is extremely bearish, it means that the stock market can be bullish in the future, and vice versa. According to the previous article of the Wall Street News website, according to the prediction of 16 Wall Street investment banks counted by Opening Bell Daily, each investment bank predicted that US stocks would continue to rise in 2025, and the cumulative increase of the S&P 500 index is expected to be 7%-19%. This also includes Bank of America. The bank's end-of-year target price for the S&P 500 index in 2025 is 6666 points, which means that there is still about 13% upside compared with the closing on December 31. On Thursday, January 2nd, on the first trading day of US stocks in 2025, the market performance was quite unsettled. Although the stock index opened higher before the session, it went down and pulled up several times in the session, and the long-short game was fierce. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

Figure: Overview of potential large-scale new shares and fund-raising amount this year. In 2024, the new stock market began to recover, and in the second half of the year, many large-scale new stock listings were recorded continuously, which greatly improved the market atmosphere. In its annual review, HKEx concluded that there were 66 IPOs in Japan as of December 20, raising a total of 83 billion yuan, making it one of the four largest IPO markets in the world. Based on the data of many accounting firms, the number of new shares will further rise to 80 in 2025, and the amount of funds raised can reach 100 to 150 billion yuan, which is expected to hit the top three in the world. Last year, the trend of "A before H" rose and added vitality to the IPO market. In April, the China Securities Regulatory Commission issued five measures for capital market cooperation with Hong Kong, and mentioned that it supported leading mainland enterprises to go public in Hong Kong. Subsequently, Midea Group (00300), a leading domestic appliance company, which was listed on the A-share market, successfully went public in September. After fully exercising its over-allotment rights, it raised a total of 35.7 billion yuan, which was the largest IPO in Hong Kong after 2021. Statistics show that after Midea's listing, the number of "A+H" shares in Hong Kong reached 149. The market is booming. Last year, many cases were overbought thousands of times. Apart from Midea, Hong Kong also recorded three new shares that raised over 5 billion yuan last year, namely SF Holdings (06936), China Resources Beverage (02460) and Horizon Robot (09660). According to Deloitte, the accounting firm, the top five IPOs raised 56 billion yuan last year, up 227% year-on-year. In 2024, the new wave picked up. Based on the data of Deloitte and HKEx, Caoji Group (02593) became the "overbought king" last year with 6082.6 times of oversubscription, followed by Jingke Electronics (02551) with an oversubscription multiple of 5676.8 times, followed by Youbo Holdings (08529), Yuanxu Technology (08637) and carote (08637). In contrast, in 2023, Zhongxu Future (09890), the "overbought king", was only oversubscribed by 103 times, reflecting that the new share subscription mood was greatly improved in 2024. It is not only the market atmosphere that has improved, but also the issuance of 18C and Special Purpose Acquisition Company (SPAC) has made progress. In 2024, three 18C new shares were ushered in, namely Jingtai Holdings (02228), Black Sesame Intelligence (02533) and Yuejiang (02432). In addition, Xidi Zhijia, which has submitted a prospectus, also applied for listing under 18C regulations; The acquisition of Huide initiated by Chen Delin, former president of HKMA, became the first SPAC company to complete the De-SPAC transaction, and it was renamed Shi Teng Holdings (02562). Optimize the increment of listing application approval During the period, a number of IPO market reforms were ushered in. The mechanism of treasury shares officially implemented in June last year helps issuers to repurchase shares and resell treasury shares, providing issuers with greater flexibility in capital management; Subsequently, in August, the CSRC and the Hong Kong Stock Exchange announced a three-year short-term revision of the new listing rules for 18C and SPAC, in which the revision involving 18C lowered the minimum market value requirements of commercial and non-commercial specialized technology companies by 2 billion yuan respectively. In addition, in October last year, the CSRC and HKEx optimized the timetable for the approval process of new listing applications, including speeding up the approval of qualified A-share companies and providing greater certainty and transparency for prospective applicants and their consultants in formulating listing plans; In December, HKEx also conducted a three-month consultation on optimizing IPO pricing and open market regulations, which involved adjusting the existing six-month lock-up period of cornerstone investors to 50% every three months.

On December 29th, Jan Hatzius, the chief economist of Goldman Sachs, and his team released the report "US Economic Analyst: 10 Questions for 2025", outlining the ten key topics that will affect the US stock market next year, and providing analysis and answers to related questions. 1. Will GDP growth exceed market expectations? This growth is mainly due to strong consumer spending, steady real income growth and healthy business investment. In addition, Hatzius and others said that the Trump administration's policy changes will put pressure on growth in 2025, but it will bring a boost in 2026, which will roughly offset the growth pressure. The drag of immigration reduction and tariff increase on the economy may appear earlier, and the boosting effect of tax reduction needs legislative support, so it takes longer. Yes. Hatzius and others predict that the growth of consumer spending in the United States will reach 2.3% in 2025, which is consistent with 2023 and 2024. In addition, Hatzius predicts that the wealth effect will provide an additional boost to residents' spending-the family financial situation remains strong and further improved due to the steady rise of stock prices. No. Hatzius and others pointed out that although the labor market in the United States was slightly weaker this year than in previous years, it remained strong by historical and international standards, and many people were too worried about the Sam rule triggered in July-after all, the number of job vacancies in the United States was still high, and there was never any sign of a layoff spiral (that is, unemployment led to reduced consumption, which further led to unemployment). In short, Goldman Sachs believes that although the unemployment rate needs attention, they still expect the unemployment rate in the United States to drop to 4% in 2025 for three reasons: The main reason for this year's weak labor market is that it is difficult to fully absorb the large number of new immigrants who flood into the labor market every month in the short term, and this trend has obviously declined and will be further slowed down in 2025; 4. Will the inflation of core personal consumption expenditure (PCE) fall below 2.4% year-on-year after deducting the tariff effect? Hatzius added that the cooling of wage pressure, the easing of lagging inflation and the stability of financial services are the main driving factors for the cooling of inflation. Yes. Goldman Sachs predicts that the Fed will cut interest rates in March, June and September 2025, and cut interest rates three times every quarter or every other meeting. Goldman Sachs believes that inflation is falling, and it is expected that the annual rate of core PCE will drop by nearly 0.3 percentage points by the Fed meeting in March next year. 6. Will the Fed's forecast of neutral interest rate be raised from 3% to at least 3.25%? Hatzius said that this forecast may be further raised in 2025, because the latest model update of Goldman Sachs shows that the neutral interest rate ranges from 2.8% to 4.6%, with a nominal average of 3.8%, while the market pricing is higher. No. During his first term, Trump repeatedly expressed his hope to fire Powell and find someone who can lower interest rates to replace him, and FOMC has said that it is not expected to cut interest rates at the meeting in January next year-if so, it will undoubtedly aggravate the tension between the White House and the Federal Reserve. Trump's first term has proved that the president can't dismiss the chairman of the Federal Reserve at will, because the law only allows the chairman to be dismissed for "just reasons", and the court is unlikely to find that "no interest rate cut" is a just reason to dismiss the chairman; 8. Will net migration become negative? Moreover, these 750,000 are mainly legal immigrants, and the illegal immigrants who are deported will roughly offset the asylum seekers and those who illegally enter the United States. No. Goldman Sachs believes that the imposition of 10%-20% universal tariffs on all imported goods in the United States will bring serious risks, and the White House will tend to avoid potential economic costs and political risks related to universal tariffs. 10. Will Congress substantially reduce the primary deficit? Hatzius and others also mentioned that the Republican leadership in the House of Representatives recently promised to find ways to cut 2.5 trillion U.S. dollars in mandatory spending items, and the Trump team also said that the newly established Government Efficiency Department can cut at least 2 trillion U.S. dollars from the federal budget, but Goldman Sachs believes that these proposals are unlikely to translate into substantial reductions in spending and deficits next year or even in 2026 for two reasons: These cuts need the support of the Democratic Party anyway, because the annual spending bill is separated from the fiscal policy reform that the Republican Party plans to "reconcile" through partisan positions. Although Republicans in Congress may cut other welfare programs, such as Medicaid, these measures may take effect gradually in a few years, and Goldman Sachs expects that these savings will be used to fund new tax breaks, not to reduce the deficit. The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

This year, the rise of Bitcoin is amazing, and the trading boom related to Bitcoin has swept through Wall Street, and the big investment banks that once sneered at it have made a 180-degree turn. At the weekend, Craig Coben, the former head of equity investment of Bank of America, pointed out in a column in the Financial Times that the attitude of wall street investment banks towards cryptocurrencies has changed significantly, and large banks that once stayed away from cryptocurrencies are now participating in it. This change reflects the profound change in the attitude of the financial community towards cryptocurrencies. Coben listed the related transactions this year. With the expansion of encrypted transactions, the list of banks participating in underwriting is increasing: Barclays Bank and Citigroup led the issuance of convertible bonds for bitcoin investment company MicroStrategy several times this year. Goldman Sachs raised funds for Applied Digital, a data center operator serving bitcoin miners. JPMorgan Chase underwritten a large number of convertible bonds for bitcoin mining and infrastructure groups Core Scientific, Mara and Iren. ...... From shunning to rushing, Wall Street lost its initial insistence step by step, and Coben felt that the wind had changed: JPMorgan Chase CEO Jamie Dimon once called Bitcoin "fraud" and "Ponzi scheme". Regulatory concerns deepened this indifference, and cryptocurrency trading became the business of smaller investment banks. In January 2024, the US Securities and Exchange Commission (SEC) approved the Bitcoin Exchange Trading Fund (ETF), marking a watershed. In addition, Trump may be re-elected, which indicates that the SEC will adopt a more friendly cryptocurrency policy, in sharp contrast to the skepticism of the current chairman Gary Gensler. What is more important is income. Compared with the potential huge income, the concern about reputation is not so important. Coben said that in the bitcoin market, transaction costs are now considerable: According to IFR data, more than $13 billion of cryptocurrency-related convertible bonds have been issued in 2024, most of which are concentrated in the latest quarter, which means at least $200 million in underwriting fee income, and MicroStrategy's $21 billion stock issuance pays 2% to the underwriting bank. This potential income makes maintaining reputation a luxury. However, when banks decide whether to devote themselves to cryptocurrency business, they are faced with a core problem: can they ensure safety through strict legal control and full disclosure of risk factors in the prospectus? Or, is it too risky to be associated with this industry that many people regard as highly speculative? Coben analysis believes that once a few banks break the rules, other banks will follow quickly. After all, no banker is willing to explain to the boss why they have not achieved their expected goals or slipped in the rankings. This depends on the risk tolerance and strategic prospect of each bank, and different types of cryptocurrency-related companies may have different risk characteristics. For example, a mature exchange like Coinbase may have a different risk profile than an investment vehicle like Bitcoin miners or MicroStrategy. Once several banks break the rules, others will be under pressure to follow suit. Collective action is safer, and if problems arise, no single bank will become the target of public criticism. Competitive instinct also plays an important role. After all, no banker is willing to explain to his boss why he didn't achieve his expected goal or fell down in the rankings. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

As the new year approaches, Powell is caught in a dilemma, that is, how to deal with the inflationary pressure that his policies may bring without openly resisting Trump. On the 27th local time, Nick Timiraos, known as the "New Fed News Agency", published an article saying that the Fed is trying to re-evaluate the impact of the new Trump administration on the US economy and inflation. He tried to avoid a conflict with Donald Trump, although some of his colleagues expressed concern that the president-elect's policies might re-ignite inflationary pressure. Trump came to power soon, and the Fed raised inflation expectations. The latest economic forecast of the Federal Reserve shows that officials expect inflationary pressure next year to be more stubborn than previously expected. Most Fed officials expect to cut interest rates only twice next year and twice again in 2026, which is less than at least four interest rate cuts expected in September next year. Now, they expect the core inflation rate (excluding food and energy) to drop to 2.5% next year, higher than the previous forecast of 2.2%. In addition, 15 of the 19 officials believe that inflation may be higher than expected, a significant increase from 3 in September. Powell has been careful not to directly link the Fed's policy with Trump's proposal. At the press conference on November 7, just a few days after Trump won the election, he made it clear that the Fed would not make interest rate policy based on speculation or speculation about the new government policy. However, the Fed often emphasizes that its interest rate policy needs to be "forward-looking", which means that it needs to consider the future price pressure and employment situation forecast. This tendency to balance has been particularly evident in the past two months. Trump threatened to raise or impose new tariffs on trading partners and tighten immigration rules, which may push up prices and wages in the short term. However, Trump's advisers said that measures to deregulate and increase energy production may offset the impact of rising commodity prices and keep inflation down. Scott Bessent, the nominee of the US Treasury Secretary, played down the impact of Trump's proposed tariffs on inflation, arguing that tariffs would not lead companies to continuously raise prices. He once said in a radio program hosted by former Trump adviser Larry Kudlow: Tariffs will not lead to inflation, because if the price of one thing goes up, unless you give people more money, they will spend less on another thing, so there will be no inflation. This time, will Powell compromise? Powell said at a news conference last week that some Fed officials considered potential policy changes in their latest forecasts, while others did not. Powell denied that the November general election was the main reason for officials' more pessimistic inflation outlook, but pointed out that the inflation data had been firmer recently. Timiraos wrote that Powell privately urged his colleagues to be cautious in their public statements and not to directly link possible White House policy changes with the Fed's response, lest Republicans think that the Fed is trying to offset policies they don't like. This is in line with his long-term efforts to maintain the Fed culture, that is, to attach importance to non-political and calm analysis. Officials may find themselves politically concerned during the election campaign or when the new government carries out transformative policy reforms. There is still great uncertainty about the impact of the policy reforms that the new government may adopt. In 2018, when Trump first promoted the escalation of trade conflicts, the Federal Reserve cut interest rates under the pressure of the President. But Timiraos believes that this time the situation may be different, because the basic conditions have changed. At that time, the inflation rate was low, but now the United States has just experienced several years of high inflation. Michael Feroli, chief American economist in JPMorgan Chase, said: "In this environment, you don't start with inflation below the target for six years, but with inflation above the target for several years." In 2018, the Federal Reserve simulated the impact of tariff increase and concluded that as long as two conditions are met, the central bank can avoid cutting interest rates in the case of rising prices: households and enterprises expect inflation to remain low, and price increases are quickly transmitted to the economy. At the press conference on December 18th, when asked how to view the impact of tariff increase in the current environment, Powell quoted the briefing from the podium. Powell said: The Committee is currently discussing the path and re-understanding how tariffs affect inflation and the economy. When we finally see the actual policy, it will enable us to evaluate what may be the appropriate policy response more carefully and thoughtfully. Risk warning and exemption clause The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.