Fed's Daley: It's too early to declare victory over inflation or think an interest rate cut is imminent
On January 20th, the President of the Federal Reserve Bank of San Francisco, Daly, stated that it is premature to declare victory over inflation and we have not yet lowered inflation to 2%. He also believes that it is too early to consider cutting interest rates.
Barclays economists advance forecast for Fed rate cut to start from June to March
Barclays economists predict that the Fed will start cutting interest rates earlier than previously thought, based on this week's inflation data. They predict that the start time will be in March instead of their previous prediction of June. "Given the recent progress on inflation, we believe that the FOMC will be comfortable cutting interest rates without needing to see a significant weakening in the economy or labor market," Marc Giannoni and Jonathan Millar wrote in a research report on Friday. As before, they expect the Fed to cut rates by 25 basis points at every other meeting. This prediction is based on the premise that the economy is gradually slowing down and that the unemployment rate is slightly higher than the Fed's long-term estimate (3.5%-4.3% as of December).
Fed's Logan: Another rate hike shouldn't be ruled out
On January 7th, Fed's Logan warned that the Fed may need to resume raising short-term policy rates to prevent a recent decline in long-term bond yields from reigniting inflation. "If we do not maintain sufficiently tight financial conditions, we face the risk of inflation rebounding and reversing the progress we have made," Logan said. "Restrictive financial conditions play an important role in keeping demand and supply in line and maintaining stable inflation expectations," she said, noting that the inflation rate is already close to the Fed's target of 2% and that the labor market, although still tight, is rebalancing. "If we do not maintain sufficiently strict financial conditions, we cannot expect to maintain price stability."
Fed Chairman: Ready to further tighten monetary policy if the time is right
Federal Reserve Chairman Powell stated that the Fed is committed to maintaining a tight policy until inflation reaches the 2% target. It is too early to speculate when the policy will be relaxed. If the timing is right, the Fed is prepared to further tighten monetary policy.
Fed officials have signaled they are in no rush to raise interest rates further, but have different views on the path of inflation
On November 30th, two Federal Reserve officials provided reasons on Wednesday to continue maintaining interest rates unchanged, while another warned that the risk of persistently high inflation should keep the option of further rate hikes on the table.
Fed Waller: If progress in lowering inflation continues, an interest rate cut may be possible in a few months
According to Federal Reserve Board member Bullard, who is generally inclined to the hawkish side, he said on Tuesday that he is becoming more confident that the interest rate currently set by the Federal Reserve will prove sufficient to push inflation down to the target of 2%, while acknowledging that if the work of lowering inflation continues to make progress, it may be possible to cut interest rates in a few months.
Commonwealth Bank of Australia: The Federal Reserve will start cutting interest rates in May next year, cutting interest rates by a total of 150 basis points
Commonwealth Bank of Australia predicts that the Federal Reserve will begin cutting interest rates in May of next year and will lower the benchmark interest rate by 150 basis points by the end of next year to cope with a mild recession in the United States. The bank's currency strategist, Carol Kong, said that we expect the FOMC's interest rate reduction cycle to be more aggressive than the market expects. Currently, the market prices in a reduction of about 90 basis points by the Federal Reserve next year. Kong said that, for now, strong US economic data may reinforce the current soft landing argument and cause the US dollar to continue to rise.
Minutes of the Federal Reserve meeting: "Proceed with caution" on interest rates, and it is appropriate to maintain restrictive monetary policy for a period of time
According to the minutes of the Federal Open Market Committee (FOMC) meeting from October 31 to November 1 released by the Federal Reserve, participants discussed the development of financial markets, expectations for monetary policy, and the development of the currency market. The minutes pointed out that participants believed that in order to achieve maximum employment and maintain a 2% inflation rate in the long term, they agreed to maintain the target range for the federal funds rate at 5.25% to 5.5%. All FOMC members agreed to "act cautiously" on interest rate issues and unanimously believed that it was appropriate to maintain a restrictive monetary policy for a period of time until inflation clearly declines towards the target. If the information received suggests that progress towards the inflation target is insufficient, it would be appropriate to further tighten monetary policy. Nick Timiraos, a journalist known as the "Fed's mouthpiece" and the "new Fed news agency," commented that when the recent decision to pause interest rate hikes was made, Fed officials were reluctant to conclude that they had completed interest rate hikes. However, the minutes suggest that officials may be willing to keep rates unchanged at least for this year. (Wall Street News)
The probability that the Fed will keep interest rates unchanged in December is 99.8%
Probability of the Federal Reserve maintaining interest rates in the range of 5.25% to 5.50% in December is 99.8%, and the probability of a 25 basis point rate cut is 0.2%. The probability of maintaining interest rates unchanged until February next year is 97.8%, the probability of a cumulative rate cut of 25 basis points is 0.2%, and the probability of a cumulative rate hike of 25 basis points is 2%. The probability of a cumulative rate cut of 25 basis points until March next year is 29.4%, the probability of maintaining interest rates unchanged is 69.1%, and the probability of a cumulative rate hike of 25 basis points is 1.4%.
Bitget Research Institute: The fall in U.S. inflation will help the Federal Reserve end tightening, and risk assets will benefit
On November 17th, the October US CPI was lower than market expectations. Specifically, the CPI was 0% on a month-over-month basis, lower than the market expectation of 0.1%; the core CPI was 0.2% on a month-over-month basis, lower than the market expectation of 0.3%; the CPI rose 3.2% on a year-over-year basis, lower than the market expectation of 3.3%; and the core CPI rose 4.0% on a year-over-year basis, lower than the market expectation of 4.1%.
