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2026-09-19 07:10:10
[Fed's Slight Rate Hike Reassures Bond Market, Inflation and Geopolitical Risks Remain Unresolved] ⑴ Federal Reserve Chairman Warsh accepted market challenges and announced a 25 basis point rate hike, maintaining US funding costs in the 3.75% to 4% range. ⑵ This magnitude is considered a low-intensity measure, and it's difficult to determine whether it's sufficient to curb the current strong inflationary trend. ⑶ Houthi rebels have resumed attacks on Saudi energy infrastructure, particularly targeting the east-west pipeline aimed at preventing crude oil shipments via the Red Sea port of Yanbu. ⑷ Saudi Arabia is urgently using this pipeline to bypass the blockade towards Hormuz. ⑸ Furthermore, Iranian-backed Yemeni forces have seized Maiyun Island and the port of Mocha, locations previously under Yemeni government control. ⑹ From a market sentiment perspective, the Fed's move eased concerns about policy failure in the bond market, but did not eliminate the risks faced by investors. ⑺ Disruptions to energy supply and escalating geopolitical conflicts may continue to drive up inflation expectations and safe-haven demand. (8) Going forward, attention should be paid to the extent of the recovery of Saudi Arabia's export substitution strategy and whether the pace of subsequent interest rate hikes by the Federal Reserve can suppress prices. (9) Overall, with policy and geopolitical factors intertwined, the sources of market volatility have not decreased.
