Zhongji Innolight Stumbles in Hong Kong Debut | The China Show | 7/30/2026

Fed Holds Rates Amid Inflation Concerns [00:00:00]

• The Federal Reserve decided to keep interest rates on hold, despite five years of inflation above target.
• Three FOMC members called for a rate hike, indicating internal disagreement.
• Fed Chairman Kevin Warsh defended the decision, emphasizing the commitment to fighting inflation.

  "This Fed will not waver."

Market Reaction and Yield Surge [00:01:00]

• Traders are questioning the Fed's credibility in combating inflation, leading to a jump in long-dated treasury yields.
• The 30-year yield reached a 19-year high, underscoring market angst about inflation and debt burdens.
• This macro pressure is impacting equity risk assets, despite some positive micro-level earnings.

  "The bond market doesn't really buy it at this moment of how serious the Fed is ready to really hike rates."

Zhongji Inalite's Hong Kong Debut [00:02:00]

• Data center component maker Zhongji Inalite is set to debut on the Hong Kong Stock Exchange after raising nearly seven billion dollars.
• This is the city's biggest listing in years.
• Gray market indications suggested a lukewarm response, with shares down about 4% ahead of the open.

  "The green market suggested that we are looking at the lukewarm response."

Moonshot AI Funding Round [00:03:00]

• China's AI disruptor Moonshot has raised three and a half billion dollars in a larger-than-anticipated funding round.
• This funding round precedes its own IPO.

  "And China's AI disruptor Moonshot raising three and a half billion dollars in a larger than anticipated funding round that's ahead of its own IPO."

Fed's Credibility Questioned [00:04:00]

• Investors are frustrated by the lack of clear criteria for future rate hikes from the Fed.
• The market perceives the Fed as potentially behind the curve in its fight against inflation.
• The 30-year yield's surge is seen as the market effectively tightening financial conditions.

  "He has no real plan or tactics to translate that into action."

Impact on Equity Markets [00:05:00]

• Despite decent corporate earnings, equity markets are struggling due to macro concerns.
• The situation is compared to the "escape Hynek" fallout, where solid fundamentals are not enough to appease traders.
• Mixed U.S. tech earnings, with Microsoft gaining but Meta disappointing, add to the complexity.

  "So it continues to be that sort of trade."

Global Economic Outlook [00:06:00]

• The market is digesting the Fed's decision, with a focus on future monetary policy.
• Concerns about inflation persist, especially with rising oil prices.
• The Chinese Politburo meeting is anticipated for potential stimulus measures.

  "So the inflation numbers which have been quite soft recently are now risked to surprising to the upside."

FX Market Dynamics [00:07:00]

• The U.S. dollar has cooled slightly following the Fed's decision.
• Analysts suggest the dollar may grind higher in the coming months.
• Currencies like the renminbi and Indian rupee are seen as potential outperformers in the Asian FX space.

  "The dollar still comes across as the cleanest dirty shirt at least in the G10 context."