Wall Street Journal (WSJ) reporter Nick Timiraos, who is recognized by the market as the Fed’s megaphone, revealed on Tuesday (13th) that consumer price index (CPI) data is unlikely to change the Federal Reserve’s interest rate hike on Wednesday 2 expected, but will complicate the discussions at this decision-making meeting.
The Federal Open Market Committee (FOMC) started a two-day interest rate meeting on Tuesday (13th). At the same time, the United States announced on Tuesday that the consumer price index (CPI) in November increased by 7.1%, lower than market expectations of 7.3% , fell sharply from the previous value, hitting a new low since December last year. The core CPI increased by 6% year-on-year, which was also lower than the market’s expected 6.1% and the previous value of 6.3%.
Investor sentiment buoyed as key inflation data retreated, Wall StreetDow Jones IndexIt once soared more than 700 points during the session, and closed slightly higher than 100 points.
Traders see a 57.3 percent chance the Fed will raise interest rates by one yard next February, up from 35.1 percent the previous day, CME’s FedWatch tool showed. Traders also saw the chance of a pause in rate hikes in March next year rising to 24.4 percent from 9.2 percent on Monday.
Timiraos tweeted on Tuesday that the Consumer Price Index (CPI) data is unlikely to change the Federal Reserve’s expectation of raising interest rates by 2 yards on Wednesday, but inflation has slowed down for two consecutive months, which may make “the rate hike rate early next year less likely.” , and how long interest rates will remain in place” is more complicated.
Timiraos also noted that “FOMC members submit their quarterly economic forecast summaries last Friday, and these officials can revise their forecasts at any time until the evening of the first day of the meeting,” suggesting that some officials may have temporarily updated their economic forecasts.
This is not the first time Timiraos has revealed that the Fed faces a dilemma.
Timiraos said on Monday that the Federal Reserve is being divided into two camps, the hawks and the doves. , and how long to keep rates at that level to keep inflation in check.”
Timiraos pointed out that Powell tends to slow down the pace of interest rate hikes and wait for the consequences of a large interest rate hike. The Fed will raise the terminal interest rate to around 5% before March next year, and then keep it at a high level for a longer period of time. It will not be too early Move to easing policy. If the Fed judges that the economic slowdown is not enough to reduce inflation sufficiently, the Fed will continue to raise interest rates at a traditional rate of 1 yard at a time.