Reference：https://edition.cnn.com/2023/07/16/business/stocks-week-ahead/index.html

The bond and stock markets might finally agree on Fed expectations

Analysis by Krystal Hur, CNN

Published 8:14 AM EDT, Sun July 16, 2023

The bond and stock markets are finally seeing eye to eye when it comes to the Federal Reserve.

Meanwhile, yields【收益】 plunged in March after the collapses of Silicon Valley Bank and Signature Bank but have edged higher in the months since.

What caused the change?A concurrent【adj. 同时发生的】 rally【反弹】 both in bond yields and stocks is atypical【adj. 非典型的】. Investors tend to prefer bonds over stocks when yields are alluringly【诱人地】 high.

However, the unusual pattern this year was driven in part by a disconnect between the bond and stock market when it comes to expectations for the Fed’s interest rate trajectory【n. [物]弹道，轨道；[几]轨线】.

That’s because while stocks moved higher on hopes that inflation is cooling and the Fed will cut rates sooner rather than later, yields rose on the opposite prediction.

Indeed, the futures markets showed that investors expected several rate cuts this year, before the Fed’s continued hikes and hawkish【adj. 鹰派的，强硬派的】 commentary【n. 实况报道；评论性文章；评论】 led expectations for those cuts to be pushed to 2024.

At the same time, yields have slipped in recent weeks on fresh data showing that the economy is cooling down.

Will yields continue to fall? It’s hard to say, considering that the economic outlook remains cloudy.

China reveals new rules for generative AI services

China has become one of the first countries in the world to regulate【控制】 generative【有生产力的】 artificial intelligence, the technology that underlines ChatGPT, reports my colleague Laura He.

The published version appears to be less stringent【严格的】 than a draft released in April. That indicates that China sees opportunity in the industry that’s all but exploded this year, as the country struggles to rekindle【重新点燃】 economic growth.