New Fed News Agency: The Fed may raise interest rates by 75 basis points in September

time:2022-12-09 08:22:35source:chakarski.com author:Trend
New Fed News Agency: The Fed may raise interest rates by 75 basis points in September

With less than two weeks to go before the Fed's September rate meeting, Wall Street Journal reporter Nick Timiraos, known as the "New Fed News Agency", has made his judgment. In an article published on September 7, Timiraos predicted that the Fed will raise interest rates by 75 basis points for the third consecutive time in September, citing the Fed chairman's previous statement that it will fight inflation even as unemployment rises. In the article, he wrote: In recent public statements and interviews by Fed officials ahead of their Sept. 20-21 policy meeting, little has been done to stem market expectations for a third straight 75 basis point rate hike. As he said, Powell made hawkish remarks at the Jackson Hole annual meeting of global central banks in late August, emphasizing the Fed's commitment to raising interest rates to bring inflation down from 40-year highs. "We'll stick with it until we're confident enough to get the job done." His eight-minute speech was also interpreted as "Powell gave up on the soft landing." Timiraos pointed out that the Fed faces two main questions at the September meeting on interest rates. One is how many basis points will the Fed raise interest rates in the next few months? What is the specific rate hike path? New York Fed President Williams expects the federal funds rate to be above 3.5% by the end of the year, while Cleveland Fed President Mester supports raising rates to above 4% by early next year. Analysts believe that if interest rates are raised to around 4% by the end of this year, or about 1.5 percentage points higher than the current level, there are currently two options. The hawks' approach is to raise interest rates by 75 basis points at the September meeting, and then follow Small rate hikes in the next two meetings, and another option is to raise rates by 50 basis points each at each meeting for the remainder of the year. St. Louis Fed President Bullard previously expressed support for a 75 basis point rate hike at the September meeting. Richmond Fed President Barkin also said that in order to restore price stability, the Fed also needs to tighten policy further, keeping inflation-adjusted real interest rates in positive territory. As of press time, the CME Group FedWatch tool shows that the current market forecasts that the probability of the Fed raising interest rates by 75 basis points in September is 80%, and the probability of raising interest rates by 50 basis points is reduced to 20%. The non-farm payrolls report released on Friday showed that the US non-farm payrolls increased by 315,000 in August, slightly higher than the expected 300,000, and the job market remained strong. A small drop in the pace of wage growth could ease concerns that an overheating labor market is pushing up prices, but it is still far from the Fed's 2 percent target. And next week's August inflation data will be the final word on the Fed's September rate hike. In addition, Powell will speak at the Cato Institute on Thursday, his last public speech before the September meeting on interest rates. ⭐Starred Wall Street news, good content not to be missed ⭐This article does not constitute personal investment advice, nor does it take into account the special investment goals, financial situation or needs of individual users. Users should consider whether any opinions, views or conclusions contained herein are appropriate to their particular circumstances. There are risks in the market, investment needs to be cautious, please make independent judgments and decisions.
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