Risk aversion fell, and U.S. stocks rebounded for 3 consecutive days

The bad news was short-lived. Although Russia denied foreign media reports that the two sides had made significant progress in the peace talks, investors digested the latest situation in Russia and Ukraine in the past three weeks, and risk aversion began to fall. The U.S. Dow Jones Industrial Average has rebounded for 3 consecutive days since the 15th, and has risen by 4.5% since March 14th to the close of March 17th.

The U.S. Federal Reserve announced a one-yard rate hike and started to shrink the balance sheet in May

On March 17, the Federal Reserve announced a one-stop interest rate hike, the first rate hike since the 2018 pandemic, bringing the near-zero interest rate to a range of 0.25%-0.5%. The Fed expects to raise interest rates six more times this year, meaning it will raise rates in each of the next six meetings, and three or four more times next year. That is to say, it will rise to at least 1.875% by the end of the year, and it will reach about 2.75% by the end of next year.

Such expectations are much faster than forecasts at the end of last year, when only three rate hikes were expected this year. At the same time, the Federal Reserve also revised down its economic outlook. Economic growth was revised down to 2.8% from the original 4%, and the unemployment rate is expected to reach 3.5%. Fed Chairman Powell hinted at a post-meeting press conference that the quantitative tightening program could begin in May.

This move was a big surprise in the financial circle. The central bank followed the pace of the US Federal Reserve’s interest rate hike every other day, and raised interest rates by one yard in one go, which fell below everyone’s eyes. The market originally expected that the central bank would raise interest rates only in June, and only by half a yard.

Oil prices retreated from highs, once falling below $100 a barrel

Oil prices fell from their early March highs as risk aversion from the Russia-Ukraine war eased. 16 from a peak of $128 a barrel on March 8. It closed at $109 a barrel on March 17. Oil prices fell, mainly for two reasons. First, the conflict between Russia and Ukraine is moving in a positive direction. A ceasefire between the two countries could happen within the next week or two.