What data should we pay attention to four weeks before the next interest rate meeting of the Federal Reserve? What will be the next four interest rate hikes this year? What will the federal funds rate be by the end of the year< Br>
recently, more and more officials of the Federal Reserve have joined the team of radical interest rate hikes, publicly mentioning the possibility of raising interest rates by 75 basis points in July, and there are many former “Dove” policy makers< Br>
on June 29 local time, Loretta mester, chairman of the Cleveland fed, said that if the economic situation remained unchanged when the Fed decided on monetary policy in July, she would advocate a 75 basis point increase in interest rates< Br>
on Tuesday, John C. Williams, chairman of the New York Fed, echoed the previous views of Powell, chairman of the Federal Reserve, on the interest rate hike at the July meeting. He believed that the 50 or 75 basis point interest rate hike would obviously become the focus of the debate< Br>
at the same time, some other policy makers, including Michelle Bowman and Christopher Waller, governor of the Federal Reserve, have previously expressed their support for raising interest rates by 75 basis points next month. Minneapolis Fed President Neel Kashkari (once a major “Dove”) also said that he might support a 75 basis point interest rate increase next month. Charles Evans, chairman of the Chicago Fed, said it was “reasonable” to consider raising interest rates by another 75 basis points. Mary Daly, President of the Federal Reserve Bank of San Francisco, also said last week that she was ready to support another 75 basis points interest rate increase at the next meeting< Br>
caoyubo, a researcher in the financial market department of the head office of China Construction Bank, told the news that recently, the Federal Reserve has continuously conveyed its increasingly hawkish position to the market. In particular, on June 22, Powell, chairman of the Federal Reserve, hinted at the possibility of raising interest rates by 100bps at the Senate hearing. Other officials of the Federal Reserve have also made similar remarks one after another, which shows that the Federal Reserve has deeply recognized the seriousness of the current inflationary pressure in the United States and has been firmly committed to reducing inflation< Br>
for the range of interest rate increase to be determined by the Federal Reserve Open Market Committee (FOMC) on July 28, Beijing time, the market generally expects an interest rate increase of 75 basis points. According to the “fed observation” tool of Chicago Mercantile Exchange, the current market estimates that the probability of the Fed raising interest rates by 75 basis points in July is 85.6%, and the probability of raising interest rates by 50 basis points is 14.4%< img alt="" style="width:600px;" src=" https://imagecloud.thepaper.cn/thepaper/image/203/302/290.png "> many economists interviewed said that the path of interest rate hike in July still largely depends on the change of inflation data in June. On July 13, Beijing time, the United States will release June CPI data.
Hujie, Professor of Shanghai School of advanced finance, shanghaijiaotonguniversity, told the news that the effect of each interest rate increase by the Federal Reserve will generally be reflected in the CPI after 5-6 months. The effect of the three interest rate increases since March has not yet fully emerged. Therefore, the subsequent changes in CPI data will directly affect the intensity of subsequent interest rate increases.
“Therefore, people will hold their breath and wait for July 13. If the CPI growth rate announced next time is still around 8.6%, the rate will probably be 75 basis points; if it is significantly lower than 8.6%, the rate of interest rate increase in July will probably be 50 basis points. Of course, there is another possibility that the CPI on July 13 is significantly higher than 8.6%, so the intensity of interest rate increase will be higher, but I personally think this possibility is very small.” Hu Jie said< Br>
wangjinbin, executive deputy secretary of the Party committee, vice president and professor of the school of economics of Renmin University of China, also told the news that the current high global commodity prices and the supply chain problems caused by the escalation of geopolitical conflicts between Russia and Ukraine are still causing great inflationary pressure on the United States; It is possible to raise interest rates by 75 basis points next time, but it is still necessary to observe the changes in price data< Br>
“even if the interest rate is increased by 75 basis points, the Federal Reserve should be very cautious. Under normal circumstances, after 75 basis points of interest rate increase, another 75 basis points increase will have a certain impact on the whole market.” Wangjinbin said< Br>
caoyubo said that the current market compares the Fed’s response to inflation with the Volcker period in the 1980s, that is, to significantly increase interest rates in a short-term way of tolerating economic recession, and to stimulate the economy after the primary contradictory pressure of inflation is relieved. In particular, after the Federal Reserve unexpectedly raised interest rates by 75 basis points at the interest rate meeting in June, the market’s acceptance of the Federal Reserve’s faster interest rate hike has been increasing. Therefore, Powell’s view that the interest rate hike would not be excluded by 100 basis points was quickly digested by the market< Br>
“from the perspective of market performance, after the Federal Reserve’s interest rate meeting in June, the market adjusted the path of interest rate increase in the later period rapidly and remained relatively stable until more data were released.” Caoyubo said that the Fed’s subsequent interest rate hike path will mainly depend on the inflation trend. If the US inflation rate remains high and does not fall, the pace of interest rate hike by the Federal Reserve may be further accelerated. In particular, the CPI data in June may directly affect the actions of the Federal Reserve at its interest rate meeting in July. If the CPI increase falls back in June, the current market expectation of raising interest rates by 75 basis points will probably be realized. Otherwise, the possibility of the Federal Reserve raising interest rates by 100 basis points will not be ruled out< br>