In 2011, Wall Street Journal reporter Jon Hilsenrath published a forward-looking article about the Federal Reserve QE2, accurately predicting the policy trends of the Federal Reserve Fed . He became famous and was called the "Fedwire". Since then, the Wall Street Journal has repeatedly exposed rumors to predict the Federal Reserve's policies.
On Tuesday, June 14, just two days before the Federal Reserve held its FOMC meeting, Nick Timiraos, a reporter from the Wall Street Journal, known as the new "Federal Mouth", published a report titled , "The Federal Reserve may consider raising interest rates by 75 basis points this week."
He hit the topic in the report:
A series of disturbing inflation reports in recent days could lead to unexpectedly dramatic hikes in Fed officials at this week's meeting rate hikes 75 basis points. After the
report was released, it caused the US stock to plummet. US stocks plunged in late trading on Monday. S&P closed down nearly 4% to its lowest since January last year, and closed in a bear market. The Dow Jones closed down nearly 880 points, the lowest since the end of January 2021.
Early this morning, the Federal Reserve predicted a 75 basis point rate hike as reported, the largest in the past three decades since 1994. After the resolution was announced, US stocks rebounded. At the Powell press conference, US stocks turned to fall and finally closed higher.
from a sharp drop to a sharp rise, why can one article cause a severe reaction from the market? Who is Nick Timiraos?
The tradition of "letting the wind" has always been, Wall Street Journal = Fed News Agency?
This starts with the Fed's tradition of letting go. As we all know, the Fed has always had a tradition of letting go through the Wall Street Journal. The reporters in charge of the Fed's reports are usually regarded as the "mouth tube" of the Fed, and their views are often considered to be instructed by the Fed.
When he was in office at Bernanke, the newspaper's chief economic reporter Jon Hilsenrath, who was responsible for the Fed's related reports, published a forward-looking article before the Fed QE2 (end of August 2010 to June 2012) and caused severe market fluctuations in trillions of dollars.
The content released by the Federal Reserve is almost exactly in line with his articles, so he became famous because of this. Since then, he has repeatedly exposed the Fed's policies, and is known as Bernanke's "monetary release" reporter and "Feder News Agency". Many people regard him as the Fed's mouthpiece and even the official spokesperson.
At that time, British reporters from the " Financial Times " joked that there was no need to read the official statement of the Federal Reserve again, because this had been published in the front page of the Wall Street Journal.
It is worth mentioning that Jon Hilsenrath is a senior journalist in the Wall Street Journal. Most of his reports focus on the economic and financial crisis. He was shortlisted for the Pulitzer Prize finals many times for reporting on the Federal Reserve and the financial crisis, and won the Pulitzer Prize in 2002.
Now, the baton of "letting go" is handed over to Nick Timiraos. Nick Timiraos is currently the chief economic reporter of the Wall Street Journal, responsible for reporting on the Federal Reserve and the U.S. economic policies. In 2008, he followed the Obama campaign team.
raise interest rates three times, "letting off"
Reviewing the report on the timing of the two interest rate hikes in March and May, Nick Timiraos successfully "predicted" the interest rate hikes.
On April 2, 2022, after the hot non-agricultural report in March was released, Nick Timiraos released an report "March non-agricultural report keeps the Federal Reserve on track for greater interest rate hikes in May", pointing out that the strong employment market is one of the main reasons why the US economy can cope with a large interest rate hike. The main point of the report is that non-farm data in March is again passed on pressure from Fed officials to raise interest rates and quickly withdraw economic measures. The labor market is overheating, and the levels of employment and wage growth may put inflation far higher than the central bank's 22% target, supporting the Fed's sharp rate hike in May, and the sharp rate hike at the next policy meeting should be a foregone conclusion.
As a result, the Fed announced a hike of 50 basis points at its FOMC meeting in May, doubled from 25 basis points in March.
time continues to turn back. On January 26, 2022, Nick Timiraos released a report titled "The Federal Reserve is expected to start hikes in March" , saying that Fed officials are preparing to raise interest rates at their next meeting in mid-March.
The report pointed out that the Fed will conduct its final round of asset purchases and rethink how and when to reverse the expansion of its nearly $9 trillion balance sheet caused by the pandemic later this year.
Judging from the results, almost all of the above predictions hit. The Federal Reserve announced a 25 basis point rate hike in March as expected, and said it would reduce the balance sheet of in May as soon as possible.
This time, the Federal Reserve "re-tells the same trick". At that time, Fed officials were in a period of silence and could not send signals to the market, so they controlled market expectations through media speeches, so they prepared for a large rate hike. Nick Timiraos was therefore considered the new "Federal Mouthpiece."
Go back to the reasons behind the sharp rise in US stocks after the announcement of this interest rate hike resolution. The market has fully anticipated the Fed's actions before the resolution. This is the result of the Fed's full "leak" . has created a "new normal" - after the Federal Reserve's resolution, US stocks rebounded and then continued to fall!
In order to fight inflation, the Federal Reserve will sacrifice employment
In an event in which the Wall Street Journal interviewed Powell, Chief Economic Journalist Nick Timiraos asked Powell, what is the difference between "soft" and "softish"?
Timiras: If the pilot told me, "Don't worry, we'll land softly", I don't know what he wants to express, I'm starting to wonder what he means.
Powell continues to use the flight analogy: sometimes the airplane lands perfectly, but sometimes it can be a bit bumpy. But it's still a good landing-you didn't even notice (bumps), right?
Powell warned: We don't have precision tools, and the landing process may involve some pain. But I think we can maintain a strong labor market, a labor market with low unemployment and rising wages.
Powell added: While this may not be the perfect labor market, it will be a strong labor market.
implied that Powell believes that the Fed will have to slow growth in order to reduce inflation to the target of 2%. Sure enough, in this monetary policy statement, the Fed deleted a sentence from May - officials expect inflation to return to 2% while the labor market will remain strong. And deleting this sentence means that in order to fight inflation, the Federal Reserve will sacrifice employment.
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