After the United States released the latest data, the U.S. stock market plummeted, and the phenomenon of U.S. Treasury yields inverting set a record.

Meanwhile, the Federal Reserve continues to send hawkish signals, adding fuel to the fire.

The dispute between the two parties in the United States over the debt ceiling issue still has not found a solution, and this farce continues like an American TV soap opera.

01, The Federal Reserve Adds Fuel to the Fire

Researchers at the Federal Reserve have indicated that they have conducted research on inflation in the United States, and the data from the research shows that the inflation data in the United States has been continuously increasing.

The data calculated last year showed that the inflation rate in the United States was about 8%. However, this year's figures remain above 5%, and this calculation is based on the MCT model.

This also indicates that the duration of U.S. inflation will be longer than originally anticipated, which poses a significant hindrance to the economic development of the United States.

As for the causes of U.S. inflation, there are issues with the prices of goods and services in the United States, but relatively speaking, the real estate sector in the United States is still contributing to inflation.

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The related discourse has severely impacted the investment market, and this impact has made the already bleak investment market even more difficult to develop.

The Federal Reserve has hinted that they will raise interest rates above the expected levels in the future and will also regulate the investment market.As for subsequent economic development adjustments, the Chairman of the Federal Reserve indicated a focus on monitoring the trends in employment data and the Consumer Price Index.

The Federal Reserve's stance has intensified market concerns, with the market now widely anticipating a 50 basis point interest rate hike in March.

02, Bearish, US stocks plummet

Early this morning, bearish news regarding bank stocks led to a significant decline in the US financial sector, substantially affecting the entire US stock market.

Strategists have pointed out that there is a widespread concern that increasing interest rates will lead to a continuous rise in the default rate of bank debt.

Due to this concern, bank stock prices have plummeted. Among the 11 sectors of the S&P 500, the financial sector suffered the most, with a drop as high as 4.1% in the early morning.

At the same time, the bank index fell by as much as 7.7%, marking the largest decline in two and a half years and a new low since October last year.

Among them, Silicon Valley Bank's decline reached an astonishing 60%, setting a record for the largest drop since historical records began.

In addition, Bank of America, Wells Fargo, and JPMorgan Chase all fell by more than 5%, with Citigroup's drop exceeding 4%.

Regarding the three major indices, the Nasdaq Composite's decline exceeded 2%, and the Dow Jones Industrial Average fell by 543 points.As of the current year 2023, the NASDAQ's viscosity increase still stands at 8.3%, while the cumulative returns of the Dow Jones Industrial Average have turned into a decline of 2.7%.

03, The U.S. Treasury Dilemma

In addition to the panic-driven declines in the stock market, the issue of the U.S. debt ceiling has also severely impacted the entire financial market.

The Republican Party has proposed that before raising the debt ceiling, the U.S. Treasury should prioritize the repayment of some of the national debt.

However, the Democratic Party strongly opposes this proposal, arguing that the ceiling needs to be raised unconditionally or suspended, otherwise the U.S. government will face a shutdown.

The debt ceiling issue has not been resolved for a long time, and the selling of U.S. debt has become increasingly severe. Currently, the yield on two-year U.S. Treasury bonds has already broken through 5%, and that of ten-year bonds has risen above 4%.

If the U.S. debt crisis continues to escalate, the damage to the U.S. economy could far exceed that of 2008.