Eliminate three impacts after the "Fed"
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Eliminate three impacts after the "Fed"
After May inflation soared to 8.6 percent, theSLOTXOhighest in more than 40 years, raising expectations that the Federal Reserve's intention to raise interest rates to just 0.5% in June is unlikely. The June 15 Fed meeting finally came as expected, with a resolution of 0.75%, the most since 1994, pushing interest rates to the 1.5 range. -1.75%
If looking at the trend of raising interest rates of individual committees or dot plot indicates that at the end of the year the interest rate will be 3.4% next year, 3.8%, the highest since the end of 2007, an increase of 1% at the same time. This year's GDP forecast was revised down to 1.7% from 2.8%.
Market and investors The Fed is expected to raise interest rates around 9-10 times from now until early next year, bringing the total interest rate to 4%, with at least 0.5% in the next three meetings.
However, the Fed statement also gave a positive outlook on the economy, saying overall economic activity was accelerating. The employment rate has been strong in the past few months. Although in the first quarter, activity slowed somewhat. Inflation continued to rise, reflecting the imbalance between supply and demand.
After the meeting, Fed Chairman Jerome Powell said: Clearly, the 0.75% interest rate hike is an unusually high. and he did not expect that such an increase would become commonplace. The July meeting is expected to rise between 0.5-0.75%. However, the decision to adjust how much will depend on each meeting. and depending on the situation and information at that time to improve inflation But the Fed intends to communicate its intentions as clearly as possible.
US stock markets responded positively. The Dow was up 303.70 points, or 1%, at 30,668.53, S&P was up 54.51, or 1.46%, at 3,789.99. The Nasdaq was up 270.81, or 2.5%, at 11,099.15.
Analysts point out that The Fed's aggressive interest rate hike could affect the world in three ways: 1. It could lead to a global recession. 2. Affects decisions of other central banks 3. Declining profits of companies
Christina Hooper, global market strategist at Invesco, said to some extent the Fed is the world's central bank. Fed moves to curb high inflation This could lead to a global recession. However, there is still hope that the Fed will succeed in soft landing without causing a recession in the US. with a sufficiently large rate hike based on the data in each period
Banque Lombard Odier Chief Investment Officer Stephen Monier said that the European Central Bank (ECB) convened an emergency meeting ahead of the Fed meeting. This reflects fears that the Fed will raise interest rates as much as 0.75%, which will hurt risky assets in the market. and differentiating the European government bond market. (fragmentation) more |
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