The US core CPI consumer inflation hit another 40-year high in September, and more sticky service inflation continued to heat up, indicating that high inflation has spread to the entire economic sector.
Wall Street locks the possibility of the Fed hike rate 75 basis points in November at 100%. Many professionals say that the scale of hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate hike rate
11html hike at least 75 basis points in May is a consensus expectation. The Federal Reserve may delay slowing down the pace of rate hikes from 12
Federal Funds Rate Futures Market data shows that traders have completely digested the possibility of a fourth consecutive rate hike in November. Andrew Brenner, head of international fixed income at NatAlliance Securities, said that based on this "bad CPI data", the Fed may even raise interest rates by 100 basis points. However, a full 1 percentage point rate hike is not the mainstream expectation of Wall Street.
, a famous reporter Nick Timiraos, known as the "New Federal Reserve News Agency", said that the inflation data confirmed the Fed's interest rate hike by 75 basis points in November. In the absence of signs that price pressure slowed down, the risk of delaying the pace of rate hikes from 12html has increased, and the possibility of central bank officials raising expectations for the rise in interest rates next year has also increased .
The "dash map" released by the September FOMC meeting shows that almost all Fed officials support a sharp interest rate hike in November and December, but the scale of interest rate hikes in December will drop to 50 basis points, and the more traditional interest rate hikes in February or March next year may be the more traditional 25 basis points and the first quarter will end. Most officials also expect that the terminal interest rate of in this round of rate hike cycle will peak around 4.6% early next year.
However, if inflation does not recede, the Fed will also raise interest rates by 75 basis points in December. The upper limit of the U.S. benchmark interest rate range will rise to 4.75% by the end of this year, breaking the Fed's peak forecast for interest rates. Traders also bet on the Fed to become more aggressive after CPI data, with the pricing of benchmark interest rates by March next year approaching 5%, and the probability of a 75 basis point hike in December rose from 34% to 60%.
More sticky service inflation has caused concerns, and markets and analysts' expectations of the Fed's insistence on violent interest rate hikes have risen
Traders and analysts' expectations of the Fed's insistence on violent interest rate hikes have risen, which is related to the constituent elements of the high CPI inflation this time.
html September CPI inflation showed that commodity-related inflation was easing with the easing of supply chain restrictions and the shift of consumer spending to the service industry, but was offset by the rise in inflation in services such as housing, medical care and auto insurance.The price of core services excluding energy increased by 0.8% month-on-month in the month, and the price of core products excluding food and energy remained the same month-on-month; the price of core services increased by 6.7% year-on-year, setting a 40-year highest in 1982, and the year-on-year increase exceeded the increase in core products prices (up 6.6% year-on-year). Seema Shah, chief global strategist at Principal Asset Management, said whether a 75 basis point rate hike in December will depend on whether inflation continues to rise unexpectedly in October. The situation is not optimistic at present. Housing and health care prices are usually the most sticky part of the CPI basket. The sharp rise confirms that price pressure is very stubborn and will not drop sharply in the short term.
Federated Hermes senior portfolio manager Steve Chiavarone also said that the risk caused by this data is that the nominal CPI inflation rate in the United States may hit a new cyclical high before the end of the year. If oil prices in December are in the mid-range of the $90 range, CPI may surpass the 9.1% high in June. Among the CPI composition, the most worrying thing is the sharp rise in service inflation.
Some analysts are worried that expanding the inflation range to the service industry will make it more difficult for the Fed to reduce inflation to its 2% target. Nathan Sheets, global chief economist at Citigroup , said that while commodity inflation begins to decline, service-based inflation may last longer, “especially given the tightening of the labor market, wage pressure and rising service prices.”
BloombergEconomistsAnna Wong and Andrew Husby also believes that higher-than-expected CPI data will make it difficult for the Fed to slow down the rate hike to 50 basis points at its December meeting.
market lacks consensus on the rate hike in 12html May and the first quarter of next year. JPMorgan Chase CEO warns that the economic situation has been out of control
Looking forward to the future, except that Wall Street consensus expects to be a 75 basis point interest rate hike in November, they have not reached an agreement on the rate hike in December to the first quarter of next year.
Barclays changed his position after the release of CPI data in September and raised the Fed's December interest rate hike to 75 basis points, which was previously expected to raise 50 basis points. Economist Jonathan Millar believes that the core service data in September is "particularly worrying" and the Fed will conduct a "more radical forward rate hike" in the coming meetings.
U.S. macro strategist Oscar Munoz, Downey Securities, said that the possibility of a dovish Fed turning is reduced in the short term, but given that so much interest rate hikes in the past year and growing concerns about financial stability, the central bank may no longer be so hawkish in terms of rate hikes, and its baseline scenario is still a 50 basis point hike in December.
Michael, head of macro strategy at Wells Fargo Securities Schumacher expects the Fed to remain quite aggressive for a long time, and markets show that the Fed ends interest rate hikes in the second quarter of next year due to concerns about the recession. Barclays even believes that interest rate cuts by 75 basis points at the last three meetings in 2023, but the fund rate target range at the end of next year will still be higher than previously expected. "If there is no many things going wrong at the same time, there will be no such inflation ." He believes that reducing inflation is not only dependent on the Fed, "we expect other areas including the global commodity market to help and reverse the relative impact on core commodity prices. "
CEO of JPMorgan Chase, the largest bank in the United States' asset value, Dimon commented on Thursday that "intuition" told him that the Fed may raise interest rates to more than 4.5%, and that the United States will not be able to achieve a "soft landing" of the economy, a recession is inevitable, and the situation has been out of control. James Atey, investment director of Aberdeen Asset Management, said that neither the market nor the Fed would want to see such CPI data. Although areas that are particularly severely affected by the epidemic have slowed down, overall inflation pressure remains high. "This will support bond yields and the US dollar, but it is new bad news for the stock market. ”
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