Another inflation figure from the United States has been released, and when analyzed alongside other economic data, the trend becomes clear: inflation in the U.S. is showing signs of rising again, while the economic situation is heading into a downturn.

Economic stagnation and high inflation are reminiscent of the familiar taste felt by seasoned investment analysts, akin to the 1970s all over again.

It is evident that the Federal Reserve is planning to reinitiate substantial interest rate hikes, and the global harvesting scheme will be intensified once more.

01, Year-on-Year Decline

Previously, the U.S. had already released its CPI data, which failed to meet expectations, with a year-on-year increase of 0.4 percentage points higher than anticipated.

Last night, the U.S. also released its PPI data, which similarly surprised the market with its deviation from expectations. The market had anticipated a year-on-year increase of 5.4%, but the actual figure was a 6% increase, exceeding expectations by 0.6 percentage points.

In reality, whether it's CPI or PPI, the year-on-year growth figures have slightly decreased compared to the previous month, but failing to meet expectations is still a very negative development. This is because the market's previous rise was based on these expectations, and now that they have not been met, it indicates that the market will undergo a correction, and a downturn in the coming period is inevitable.

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02, Month-on-Month Growth

Undoubtedly, the more concerning aspect is the renewed increase in month-on-month data.

The PPI, as announced last night, increased by 0.7% month-on-month, marking the largest growth rate in the past six months.If everyone still remembers, they must not have forgotten that the CPI a few days ago also showed a month-on-month increase of 0.5%.

I have always emphasized that month-on-month data is more realistic because the comparison basis for year-on-year data is the same period last year, when inflation was already very severe, and the base number was very high, which makes the current year-on-year data appear relatively low, but this is a serious distortion.

Month-on-month data is compared with the previous month, and this time it has risen again, indicating that not only has it not decreased at a high level, but there is also a sign that prices will continue to climb.

After the data was announced, Federal Reserve officials said that the current economic data supports continuing to raise interest rates.

Brad, on the other hand, went further and said that he would support a 50-point interest rate hike at the March meeting, and did not rule out another 50-point interest rate hike at the next meeting, which means that the Federal Reserve may raise interest rates by as much as 100 points in the next two meetings.

It seems that the just-reduced interest rate hike will increase again.

03, financial market turbulence

Affected by the news, U.S. stocks fell significantly last night.

The Dow Jones Industrial Average closed down 431 points, and the decline of all three major indexes exceeded 1.2%.

The European stock market, which closed earlier, generally closed in the red, although the increase was not significant, but at least it did not fall. By the time of the closing this morning, all shares fell, indicating that U.S. stocks are more affected by inflation data.The final batch of technology stocks almost all declined. Apple and Google's drop factor (df) exceeded 1%, while META and Microsoft's decline surpassed 2.5%, with Netflix and Amazon's drop approaching 3%.

Conversely, Chinese concept stocks experienced mixed gains and losses, with the China Golden Dragon Index only falling by 0.22%, outperforming the broader market.

In addition, the entire financial market has also responded accordingly.

Judging by economic data, the United States is highly likely to raise interest rates significantly again, causing the price of gold to retreat from its high. It previously peaked at $1,975 but has now dropped to $1,841.

International crude oil prices have also faced certain pressure in recent days, with the highest price being $80.6 five trading days ago, and now slowly declining to $78.3.

In the foreign exchange market, most non-US currencies have seen a certain degree of depreciation, with the Chinese yuan exchange rate unexpectedly breaking through 6.88.

04, Harvesting Intensifies

From other economic data, we can also discern that the current economy is not ideal and shows signs of worsening.

The Philadelphia Fed's manufacturing index has now dropped to its lowest since May 2020, currently at -24.3.

Moreover, the US real estate market continues to linger at a low level, with the total number of new housing starts also at its lowest since June 2020.Additionally, the wave of layoffs in the United States has shifted from tech giants to more other industries, with Bank of America announcing that its investment banking division will implement global layoffs. The specific number of people has not yet been determined, but it reveals an unsettling signal.

The US dollar once again stirs up the global financial market through interest rate hikes. This time, can it achieve the expected results?