May 15 important time window update:
The Federal Reserve officially changes leadership: Current Chair Powell's term ends on May 15, and Kevin Warsh is expected to complete the confirmation process and officially take office on the same day or before. Trump's visit to China concludes: President Trump will make a state visit to China from May 13 to 15. The most significant announcements, such as the outcomes of meetings with leaders and negotiation results, are likely to be released on the final day of the trip. Expiration date for US-China monthly options: The last trading day for the month’s stock index futures/options contracts is concentrated on May 15 (Friday).
Combined with the strong non-farm payroll data released this month, and the CPI and PPI confirming further strengthening of inflation, the yield on 30-year US Treasuries breaking through 5%, along with large IPOs like SpaceX going public, it is highly probable that Warsh’s first two months in office will involve balance sheet reduction. Liquidity is expected to tighten further. Beware of potential pullbacks triggered by subsequent lack of market liquidity.
Weekly macro analysis column: Friends who like it, please follow
Important events this week!
US-China Competition and Security Dialogue
Expectations for high-level US-China meetings: Fundamental contradictions are not expected to be resolved; the core focus will be shifts in pace, such as the US approach to the Iran conflict. At best, some bilateral trade agreements might be reached, including Boeing aircraft, soybean orders, and easing of certain export restrictions. The US and China plan to establish an AI safety hotline to prevent crises caused by loss of AI control. The Trump administration is considering easing chip restrictions. AI competition has become a 'digital arms race,' with both sides competing in technology, military, and supply chains...

Weekly macro analysis column: Friends who like it, please follow
Trump's war fears
WSJ analysis points out that Trump's aggressive stance on the Iran war is a bluff, driven by fear. He is worried about repeating Jimmy Carter’s loss in the election due to the Iran hostage crisis. Trump's impulsive style has not been tested in prolonged conflicts. He refused to capture key islands for fear that U.S. military casualties would affect his election prospects, with his fear stemming from political consequences.
Extreme concentration of US stock profits
The U.S. stock market has reached new highs, but profit growth is highly concentrated in AI hardware, particularly reliant on NVIDIA. Excluding NVIDIA, M7 earnings growth plummets, raising concerns about market breadth. The current valuation of U.S. stocks is comparable to that of 1929, with its rise dependent on fragile conditions such as an unbroken AI narrative, controllable inflation, and conflict resolution, posing significant mean reversion risks.
China seizes iron ore pricing power
BHP Group Ltd reached a long-term agreement with China Mineral Resources Group, incorporating for the first time a spot index priced in RMB, reducing the weighting of the Platts index. By introducing an RMB-based index, the dominance of dollar-denominated pricing is gradually being broken.
Weaponization of the US dollar swap
U.S. Treasury Secretary Bessent revealed that multiple Gulf and Asian countries are seeking dollar swap lines. Warsh hinted that in the future, the Federal Reserve will cooperate with the Treasury to use dollar swaps for geopolitical purposes. The U.S. is transforming dollar swap lines from financial stability tools into geopolitical weapons, rewarding allies and punishing adversaries. While this will strengthen dollar hegemony in the short term, it will harm the credibility of the dollar in the long run.
US-China AI arms race: Open-source models and chip self-reliance
China Deep...