#美国9月PPI大超预期 #WCTCS9 The Fed restarts rate hikes: a far more consequential game than the market imagines, true global panic has yet to arrive
The starting gun has fired, but the storm is still brewing.
Many people see U.S. stock indexes still fluctuating and assume that a new round of Fed rate hikes is just another routine monetary move, already fully priced in, with limited risk. But look beyond short-term market swings and connect the dots between global geopolitics, capital flows, and asset bubbles, and you’ll see that this resumption of rate hikes is a high-stakes financial gamble by the United States.
It is not simply a policy tool to control inflation; it is a key attempt to shift the global crisis elsewhere. If it succeeds, the U.S. can scoop up cheap assets around the world and defer its domestic crisis for several years. If it fails, the dollar’s credibility will suffer, the AI tech bubble will burst outright, and the risks will explode at home in the United States.
The first rate hike in September is only the opening act. True market panic will most likely erupt around December. The most critical window for ordinary investors is the upcoming rebound peak—the second sell point. Taking advantage of this window to exit positions and sit on the sidelines to protect yourself will be the most practical survival strategy for the period ahead.
I. A rate-hike restart marked by twists and turns: a financial showdown with no way back
Looking back at the entire process of restarting rate hikes, it has been full of back-and-forth. Market expectations initially pointed to a rate hike at year-end, then moved up to July, and after several rounds of maneuvering, the hike finally landed in September. These repeated shifts in timing were not driven by simple data fluctuations, but by ongoing compromises among domestic U.S. tensions, its alliance system, and global geopolitical conflicts.
The September rate hike marks the official start of a new tightening cycle. But the market reaction so far has been sharply divided.
East Asian markets reacted furthest in advance: Chinese, Japanese, and South Korean stocks had already peaked and turned lower in June, pricing in rate-hike expectations early. South Korean stocks saw a maximum drawdown of nearly 40%, the adjustment in A-shares was about 25%, while Japanese stocks were relatively resilient, falling less than 10%. European stocks generally peaked in August; French stocks fell about 10%, German stocks pulled back by less than 5%, and the Euro Stoxx 50 fell by around 8%. The Dow Jones moved broadly in sync with Europe, peaking in early August before correcting.
Only the Nasdaq has remained resilient, repeatedly hitting new highs.
The reality behind this divergence is that today the U.S. economy is almost entirely reliant on capital spending by AI tech giants to stay afloat. Huge amounts of capital have poured into the AI sector, supporting tech-stock valuations and becoming the last engine of the U.S. stock market. Beyond that, it is hard to see any new, sustainable drivers of economic growth.
From this perspective, this round of rate hikes is essentially a last-ditch effort by the United States.
The previous round of rate hikes in 2022 did not fully achieve the goal of shifting the crisis elsewhere. This time, the restart of rate hikes is aimed first at transferring risk to the circle of U.S. allies. If this round of maneuvering also fails to meet expectations and the path to shifting the crisis abroad is blocked, the crisis can only be absorbed within the United States, making a systemic-risk explosion difficult to avoid.
That is why this round of rate hikes has an all-or-nothing character.
Many people use past rate-hike cycles as a reference, instinctively setting limits on how high rates can go and where they will peak. But this time, the strategic maneuvering far outweighs the usual effort to fight inflation. The logic is straightforward: pressure the other side until it can no longer bear it; otherwise, the pressure will rebound on the U.S. itself. This means the scale of rate hikes could far exceed the expectations of mainstream market institutions.
We can develop a framework for this round of rate hikes along two dimensions: time and scale.
In terms of time, the U.S. economy and financial markets have a limited ability to withstand persistently ultra-high interest rates. High rates will continue to raise debt-servicing costs for governments and businesses and drag down asset prices. Considering the constraints, this period of high rates will most likely last 1 year-1.5 years and is unlikely to drag on much longer. Since the timeline cannot be extended indefinitely, the measures will become more aggressive.
In terms of scale—that is, the size of the rate hikes—the short-term ceiling can be considered unlimited. The dollar’s unique status as the world’s reserve currency means that even if some domestic companies and institutions face crises, the U.S. can still use targeted, patchwork liquidity injections to rescue domestic institutions and contain localized risks. European, Japanese, and South Korean economies do not have this option.
There is one important side indicator for assessing the resolve behind rate hikes and their potential upper limit: international oil prices.
The market should be alert to the possibility that the U.S. has an incentive to inflame tensions in the Middle East, especially by escalating its conflict with Iran, to drive up oil prices. An extreme surge in oil prices would further expand the Fed’s room to raise rates. Public signals currently indicate that the U.S. is making preliminary preparations for military action against Iran. At the same time, a strategy to encircle Europe is also being advanced.
Geopolitics is never isolated news; it is a supporting tool in financial warfare. Conflicts in the Middle East and Eastern Europe are external variables serving monetary tightening.
II. Calm is only an illusion: the real panic window is set for around December
Financial warfare is about shaping expectations. Panic does not begin only when a crisis occurs. It is the steady buildup of expectations and the collective rush of capital to exit that trigger devastating market shocks. Once rate hikes reach their later stages and all the negative news has been realized, panic will instead gradually fade. So the most damaging phase is the first half, when expectations are building.
Counting from the first rate hike in September, the next six months—that is, until before March next year—will be a high-risk window when expectations of risk build up.
The reason the market is still relatively calm is that the U.S. is managing expectations in advance. It has recently been sending signals of easing tensions between China and the U.S. The tone for the November APEC and December G20 summits has already been set, projecting an atmosphere of peaceful coexistence between major powers.
After easing its biggest external concern, the U.S. will shift its focus to the Middle East and Europe.
The market has already lowered expectations for another rate hike in October, with September’s nonfarm payrolls data completing this round of expectation-setting. The market has nearly reached a consensus: December 9 will bring the second rate hike. The period from now until December 9—just over a month—is the most important window to watch.
Two developments underway could become the fuse that ignites global markets around December.
First, the U.S. will not seek a ceasefire with Iran; instead, it is stepping up preparations for a strike against Iran. On the one hand, this would push up international oil prices, creating the conditions for larger rate hikes. On the other, it would create an energy crisis and further squeeze Europe’s room to survive. If oil prices spiral out of control, global inflation will rebound, further strengthening the case for rate hikes.
Second, the U.S. and Russia are engaged in an exchange of interests. The U.S. is delivering tangible benefits to Russia by easing restrictions on Russian fuel oil exports and even directly purchasing Russian diesel. In exchange, Russia needs to make moves on the Russia-Ukraine battlefield and create greater geopolitical panic.
This chain of transactions stems from the visits to Russia and Ukraine by the U.S. special envoy and Kushner in early September. Based on the timeline, the relevant personnel will visit Russia again in late October. After that, the intensity of the Russia-Ukraine conflict will most likely escalate sharply. The conflict could even spill over, affecting Belarus and Poland, while talk of nuclear deterrence between Russia and Europe could resurface.
This series of geopolitical events will be unleashed around the time of the second rate hike in December. A surge in oil prices, an escalation in hostilities, and heightened nuclear-risk rhetoric will combine—and only then will true global financial panic arrive.
In other words, the market has little time left to remain relatively calm.
Many investors make the mistake of waiting until a major sell-off has already happened before realizing that risk is approaching. But by the time panic selling hits the market, the risk is often already in its middle or later stages, and losses have become very real. The value of macro analysis is seeing the approaching storm before the risks have been priced in.
III. The second sell point is approaching: the rebound peak is ordinary investors’ last window to exit
When macro risks are translated into practical action, it comes down to trade exit points.
In May this year, the market saw its first risk warning, corresponding to the first technical sell point, a turning point in the broader trend. Some assets peaked in late May, while many indexes made their final highs after surging in June. Looking back, May and June were the first high-risk peak zone of this cycle.
Since then, the market has gone through two rounds of declines. The second round is now unfolding, and what we are waiting for is the second sell point.
The timing window is far more predictable than the extent of the ups and downs. The market will see a rebound under one of two scenarios: if a major decline comes first, a larger rebound will follow; if the dip is only slight, the rebound will also be weaker. Whether it is a major or minor rebound, its peak could very well be the second sell point.
This is a crucial opportunity for ordinary investors to reduce positions and exit.
To verify the pace of capital outflows, one key external indicator to track is the yen exchange rate.
The Bank of Japan has intervened in the exchange rate twice before, spending over $100 billion to buy yen and pushing the exchange rate from around 164 back up to the 153 range. Behind the intervention was a very practical goal: the U.S. still has huge amounts of capital parked in the Japanese stock market and needs counterparties to sell to in order to convert it into dollars. Without intervention, large-scale selling would directly cause the yen to collapse, making it difficult for capital to exit smoothly.
The U.S. has verbally expressed support for yen intervention, but its actions have been very limited. After two rounds of intervention, it is likely that U.S. capital has nearly finished exiting the Japanese market.
If the yen exchange rate falls again and returns to fluctuating in the 160‑163 range, that will signal that the large-scale U.S. capital outflow from East Asia is essentially complete. At that point, a small amount of capital will remain in the market specifically to carry out a sell-off. The yen’s depreciation back into this range will be an important signal that global markets are close to coming under pressure simultaneously.
We are not the main battleground in this crisis, but financial markets are highly globalized, and no one can remain completely unaffected. Severe turmoil in external markets will inevitably be transmitted to domestic markets through capital flows, risk appetite, and sentiment. We cannot afford to take chances.
Another bomb hanging over us is whether the U.S. AI tech bubble will be punctured and whether it will develop into a global systemic financial crisis.
Since September 23, the yield on U.S. 10-year Treasuries has remained above 5%. Long-term yields in major European countries, including Germany, France, and the U.K., have also risen sharply, and the real interest-rate differential between the U.S. and Europe has continued to widen. This looks more like the U.S. deliberately stress-testing the pressure of rising Treasury yields, testing the upper interest-rate limits that economies and businesses can withstand and gathering real-world data to guide the pace and scale of future rate hikes.
Many AI giants’ projects use off-balance-sheet SPV financing, with bond rates generally already at 8‑9%. If rate hikes continue sharply, financing costs will rise further. The real fuse for a blowup is not book valuations, but whether tech giants’ cash flows can withstand a high-interest-rate environment. If cash flows break down, the AI bubble will face a hard landing.
So far, the signals of a systemic crisis have not been fully confirmed. We will have to wait until early next year to see the full real impact and ultimate intent of this rate-hike cycle.
IV. The practical choice for ordinary investors: the market is complex, and waiting on the sidelines is also an opportunity
When the macro environment becomes increasingly uncertain, ordinary people are most prone to two kinds of mistakes.
One is to underestimate risk, thinking that geopolitical conflicts are far away, rate hikes are happening on the other side of the ocean, and the domestic market can follow its own path, so they stay fully invested and keep speculating. The other is to panic excessively, see all the negative news, then blindly buy the dip or short the market, trying to bet on a crisis or a collapse and treat the crisis as a chance to get rich.
Both mindsets are extremely dangerous.
For the vast majority of ordinary participants, we do not have institutions’ information advantage, hedging tools, or sufficiently flexible trading methods. All we can do is make use of clear timing windows.
If the rebound produces the second sell point as expected, the most rational move is to exit positions and wait on the sidelines.
Many people resist waiting on the sidelines, thinking that holding no positions means missing out on opportunities. But during a period when macro risks are being released all at once, not losing money is itself a huge victory. There will always be another opportunity in the market, but if your capital suffers a major drawdown, recovering it will take several times the effort.
Do not imagine that gold is lying everywhere during a crisis. When a real crisis hits, liquidity dries up first, and the vast majority of assets are sold indiscriminately. The idea that gold is everywhere is a story that only comes after risks have been cleared. In the middle of the storm, survival comes first.
Of course, we should not go to the other extreme and treat every projection as an inevitable fate. Geopolitics is unpredictable, policies are subject to maneuvering, and the market always holds surprises. Macro analysis is for building risk awareness, not for making precise bets.
We should closely track several confirmation signals to assess whether the projection is holding:
1、 Whether the second rate hike takes place at the Fed’s December policy meeting;
2、 Whether tensions in the Middle East and the conflict between the U.S. and Iran escalate, and how far international oil prices rise;
3、 Whether fighting intensifies on the Russia-Ukraine battlefield and the conflict spills over;
4、 Whether the yen exchange rate returns to the 160‑163 range;
5、 Changes in long-term Treasury yields and risk signals in AI companies’ financing and cash flows.
As the signals are confirmed one by one, the risks draw closer step by step; if all the key signals fail to materialize, then we need to revise our judgment promptly. Never fight the market head-on; keep monitoring and adjust dynamically.
September’s rate hike is only the opening of the curtain, not the end of the show.
Much of the news focuses on daily market ups and downs and short-term data fluctuations. But what will truly determine the fate of assets over the coming year is the monetary cycle, global capital flows, and the maneuvering between major powers.
This rate-hike cycle is not simply about curbing inflation; it is a gamble with the dollar’s credibility at stake. If the U.S. can reap gains abroad, it will shift the crisis outward; if that path is blocked, it will bear the cost internally.
Ordinary investors cannot change the course of the world. The only thing we can do is understand the signals conveyed by the cycle and protect our principal.
The second sell point during the rebound may be the most important short-term exit window available to us. When uncertainty far outweighs certainty, staying put and watching the storm is the best defense.
