Although the Fed is likely to raise interest rates by 75 basis points in November, the market has differences on the 50 basis points rate hike in December. Therefore, at the meeting from the 1st to the 2nd next month, a debate will be held on reducing the rate hike.

" Wall Street Journal " reported that Fed officials may consider slowing down the pace of aggressive interest rate hikes. Although the Fed is likely to raise interest rates by 75 basis points in November, the market has differences on the 50 basis points rate hike in December. Therefore, at the meeting from the 1st to the 2nd next month, a debate will be held on reducing the rate hike.

After the media released this news, market sentiment was boosted. US dollar index fell in the short term, US bond yield fell at a high level, US stock futures rose rapidly, the three major indexes closed up more than 2%, and the Dow Jones Industrial Average rose more than 700 points. The 10-year US bond yield, known as the "anchored of the global asset pricing ", once rose to above 4.3%, setting a new high since 2007.

Since the Federal Reserve launched the interest rate hike cycle in March this year, it has set the largest intensive interest rate hike since 1981, seriously damaging the smooth operation of the economy. Therefore, if inflation is eased, the Fed may slow down interest rate hikes in December or reduce the intensity of interest rate hikes.

But this struggle against inflation is far from dawn. The latest inflation data shows that the United States' core CPI rose 6.6% year-on-year in September, setting a new high since August 1982.

Previously, Tesla CEO Musk briefly responded on social media that the forecast for the decline of global economy may continue until the spring of 2024. Amazon founder Bezos also said that there are various possibilities in the US economy, and everyone should prepare for the difficult times in the future. In addition, interest rate hikes may have an impact on the crypto market. Although cryptocurrencies are often touted as a tool for to hedge against inflation, Fed rate hikes correspond to a decline in cryptocurrency prices.

summary

As US interest rates continue to rise, demand will be suppressed and the US economy may continue to slow down. As the voices of negative voices continue to emerge, the Federal Reserve's position suddenly "die voices continue" and caused great fluctuations in the market. Let's wait and see whether the United States will pursue a soft economic landing or its "last efforts" to overcome inflation.