1. The core lies in the real policy interest rate in the United States. As a representative of the real policy interest rate, the real interest rate of 2-year US debt has been at a historical low recently, which shows that the soaring nominal interest rate has not restrained the rebound of inflation expectations, indicating that monetary policy is still loose in fact; Historically, when this real policy interest rate soars, there will be a sharp correction in the US stock market.

2. The trend of real policy interest rate in the United States is particularly critical. If the real policy interest rate rises with the nominal interest rate, then the current decline in US debt and the rise in US stocks will become a double blow, and it is difficult for gold to continue to strengthen. Will this happen? Since real interest rate = nominal interest rate-inflation expectation, we might as well judge the trend of real interest rate of 2-year US debt from the two terms on the right side of the equation.

3. From the nominal interest rate, the interest rate of 2-year US bonds will continue to rise with the federal funds rate. Historically, the 2-year US bond interest rate and the federal funds rate have been consistent, but since 2022, the former has rebounded far more than the latter. The last time a similar situation occurred was 1994. Judging from the situation at that time, the two-year US bond interest rate continued to rise by 63bp in the process of the Fed raising interest rates by 50bp twice in a row. Therefore, if the Fed raises interest rates by 50bp twice in May and June, the nominal interest rate of the 2-year US bond interest rate is still expected to rise further.