Tom Lee was right this time: there's nothing wrong with the bullish judgment in early September At last September's FOMC meeting, the new chairman Walsh chose to raise interest rates by 25 basis points for the first time in three years. At that time, the market sentiment was filled with grief, but looking back at the analytical framework provided by Tom at that time, there was no problem with the analysis. Tom's analysis of the three major reasons given by the Federal Reserve for interest rate hikes is The first reason is that the economy is too strong. Tom's rebuttal is that the Cleveland Fed had argued 30 years ago that economic growth is not the enemy of low inflation, and the Kansas Fed has also made it clear this year that supply side expansion driven by AI and productivity progress can simultaneously increase output and lower prices, which is essentially deflationary in nature and should not be used as a reason for interest rate hikes. Even more ironic is that Walsh himself once said when he was a member of the Federal Reserve Board that the Fed should not raise interest rates just because of economic growth, but should keep a close eye on inflation. This time, he slapped himself in the face. The second reason is that the rate of inflation falling back to 2% is not fast enough. Tom pointed out that there are serious statistical distortions and one-time disturbances in the current inflation data. Goldman Sachs' analysis shows that there are four major one-time factors that will naturally reduce inflation by 100 basis points in the next six months. The rise in the stock market has led to a proportional increase in asset management fees, which have been mistakenly recorded as service inflation. The abnormal fluctuations of flash memory and storage chip prices deviating by 9 standard deviations have distorted the inflation sub items of software and accessories. In addition, the short-term price pulse caused by Iran's geopolitical crisis and tariffs. More importantly, the Bureau of Economic Analysis in the United States will adjust the statistical method of core PCE on September 30th, and is expected to directly lower it by 20 to 40 basis points, causing the core PCE to plummet from 3.4% to nearly 3.0%. The third reason is geopolitical and oil shock. Tom's rebuttal is that the surge in oil prices is a typical supply side shock, and monetary policy has no effect on the short-term supply side, and there is a significant lag in policy transmission. When the interest rate hike starts to show its effect in the real economy six months later, the impact of oil prices has already subsided. By then, this round of tightening will become an untimely suppression of a normally functioning economy, and the timing will be reversed. Why did Tom judge that this was the perfect time to enter In addition to breaking down the reasons for interest rate hikes one by one, Tom also listed six core logics that support his continued bullish stance. One is that hawkish policies have reached their peak. The Federal Reserve has already shown its toughest trump card and cannot become more hawkish. As long as the data slightly softens, officials will have to backtrack from extreme hawkish statements. The second is the PCE statistical revision on September 30th, which will provide direct data support for the dovish shift, and this is already on the agenda. Thirdly, Trump's reaction this time is thought-provoking. He did not fiercely criticize Walsh like he did with Powell before, but reiterated that the United States should maintain low interest rates below 1% to alleviate the interest burden. His tone was noticeably gentler, indicating that this interest rate hike is likely just a short-term gesture by the new team to establish anti inflation credibility, not to start a tightening cycle. Fourthly, the magnitude of interest rate hikes is not enough to truly strangle the economy. A slight increase of 25 to 50 basis points cumulatively cannot destroy the current resilience of the US real economy and the profitability of listed companies. Fifthly, there has been a divergence in the technical aspect, with the market experiencing a waterfall like sharp decline after the interest rate decision, but the RSI is quietly recovering, which is similar to the trend before the bottoming out and sharp rise in August. Sixth, it is a barometer for the consumer side. Costco is about to release its financial report, which has the opportunity to boost market confidence in the resilience of US consumption. The leading trend has emerged, and lagging sectors are also repairing From the perspective of combination performance, this logic has indeed been well executed during this period. The best performing sectors in the overall market portfolio are the crypto ecosystem (MicroStrategy, Robinhood) and AI infrastructure. Biotechnology and cryptocurrency mining companies are also leading in the mid cap portfolio. Relatively lagging are financial stocks, which are suppressed in the short term by interest rate hikes and yield curve disturbances.