Federal official latest statement shows that after the release of the core CPI of the United States in September, which unexpectedly hit a 40-year high, Fed decision makers were not satisfied with the inflation situation and intend to let interest rates eventually rise to higher than their previous plans, but there may be no need to further increase the speed of rate hikes .
This year's vote committee George: Rate hikes must be raised and restricted interest rates will be maintained for longer. But too fast rate hikes may interfere with markets and economies
On Friday, local time, Esther George, a hawkish Federal Reserve official and Kansas Fed chairman who has the voting rights for the Monetary Policy Committee this year, said that the September CPI data released on Thursday reminded the Federal Reserve that it needs to do more work to curb inflation. The Fed will continue to push for currency tightening until inflation turns.
At the same time, George pointed out that given the stubborn inflation high, the Fed may have to raise terminal interest rates and keep that level of interest rates longer. Compared to this, she is more wary of the speed of action and the degree of radicalism. The Fed is expected to continue hikes, but hikes too quickly may disrupt financial markets.
George believes that the Fed's monetary policy needs to be transferred to a restrictive range, and the degree of restrictions remains to be seen because the impact of policy actions is lagging. Given recent volatility in financial markets and the need for time to affect the economy, the Fed should pay attention to hikes and not act too hastily, otherwise it may "interference in financial markets and the economy and may ultimately backfire."
George said
"I am in a camp that tends to be more stable and slower (action). Doing so can start to observe how the lag of (monetary policy action) will work. Now (action) has not fully played a role in the real economy."
"A significant adjustment of policy interest rates may increase uncertainty in future actions." "I think it is particularly important to minimize policy uncertainty as market volatility intensifies."
Dove Daly: Interest rates reach 4.5% to 5% "is the most likely result"
On Friday, dove-oriented Federal Reserve official and San Francisco Fed Chairman Mary who has the right to vote in the FOMC meeting in 2024 (right) Mary (who is the most likely result) on Friday. Daly said that while there were some signs of a cooling economy, she was "very supportive" to continue hikes, leaving interest rates at a level that restricts the economy.
Daly commented that the recently released CPI inflation data is "very disappointing". She expects the Federal Reserve to continue hikes in the next few months and stay at that level after interest rates rise
Daly said that if the economy needs it, the Federal Reserve will not go all the way to black, it is not that it cannot turn. However, raising interest rates through interest rates to reach 4.5% to 5% is the most likely result, and the Fed will then plan to keep interest rates "at that level for a while."
was also on Friday. Fed director Lisa Cook, who permanently owned the FOMC voting rights during his tenure, said that interest rate hikes may be needed and the Fed will continue to act until the task of curbing inflation is completed.
Wall Street News noticed that after the announcement of CPI on Thursday, the market's expectations for the Federal Reserve to maintain aggressive interest rate hikes at the end of this year have significantly heated up. On Friday, the "Federal Observation Tool" of the Chicago Mercantile Exchange (CME) showed that the current U.S. federal funds rate futures trading market expects that the probability of the Federal Reserve hike 2 basis points in November is close to 100%. At the same time, the probability of the Federal Reserve's policy interest rate rising to 4.5% to 4.75% in December reaches 75%.
This means that the market expects that after the fourth consecutive rate hike of 75 basis points in November this year, the probability of the Federal Reserve also decided to raise 75 basis points in December is more than 70%. The probability of this forecast a week ago is only 23.4%, and nearly 62% a day ago.
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