will it be reduced? how much? the federal reserve will hold a rate meeting and the results are expected to be announced tomorrow morning.
2024-09-18
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the federal reserve's monetary policy meeting was held from the 17th to the 18th local time.
according to foreign media reports, the current market focus is on whether the interest rate will be cut by 25 basis points or 50 basis points. the federal reserve has raised interest rates 11 times from march 2022 to july 2023, with a cumulative increase of 525 basis points. over the past year, the federal reserve has maintained the target range of the federal funds rate between 5.25% and 5.5%, the highest level in 23 years.
the federal reserve's monetary policy meeting will make the latest judgment on interest rate trends based on the current economic situation in the united states.
previously, fed chairman powell said in late august that the time had come to cut interest rates, almost "explicitly" indicating that the fed would announce a rate cut at its monetary policy meeting in september. however, data released last week showed that the us core cpi rose 3.2% year-on-year in august, exceeding market expectations, which cooled market expectations for a sharp rate cut by the fed.
at present, the market generally expects that the federal reserve will start the first interest rate cut since march 2020 this week, thus opening the curtain of the interest rate cut cycle. however, there are different opinions on whether the interest rate cut will be 25 basis points or 50 basis points.
tao chuan, chief economist of minsheng securities:after the release of the august non-farm payrolls data in the united states, fed officials did not have a clear preference for the magnitude of the first rate cut. the slowdown in economic growth is not enough to trigger a half-percentage-point rate cut, but the fed does not rule out a larger rate cut in the future. therefore, in addition to the rate cut, the interest rate decision at this meeting and the fed's judgment on the economic situation at the press conference are also a major focus of the market.
international financial markets fluctuate greatly due to the expectation of the fed's interest rate cut
global financial markets have already responded in advance to the federal reserve’s interest rate meeting, with volatility in many markets increasing.
in the past week, the international gold price has soared again. since september 12, the london gold spot price has risen for three consecutive trading days, reaching an intraday high of $2,589.68 per ounce on september 16, setting a record high. the main december contract of gold futures on the new york stock exchange also broke through the $2,600 per ounce mark on september 13, setting a new high since its listing.
at the same time, the u.s. stock market also fought back strongly, with the s&p 500 and nasdaq composite recording their biggest weekly gains this year, up 4% and 6% respectively.
in the foreign exchange market, the u.s. dollar fell below the key psychological level of 140 against the yen on monday, hitting its lowest level in nearly nine months.
analysts pointed out that the fed's interest rate cut cycle is about to begin, and the real interest rate of us treasury bonds and the low operation of the us dollar are the core factors that promote the recent rise in international gold prices. after the european central bank decided to cut interest rates last week, the euro strengthened against the us dollar, which hit the us dollar index. data showed that the us economy was slowing down, which strengthened expectations for the fed to cut interest rates, and gold prices soared.
tao chuan, chief economist of minsheng securities:the market is becoming very emotional. currently, u.s. stocks and bonds are much more sensitive to economic indicators than in the past. any unexpected weakening of u.s. economic indicators will exacerbate market concerns about a u.s. economic recession, thereby exacerbating volatility in financial markets.
monetary policies of many countries around the world have shifted due to expectations of interest rate cuts
the fed's interest rate cut expectations have affected not only the financial market, but also many countries have begun to adjust their monetary policies to cope with the impact of the fed's interest rate cut on financial and economic and trade activities. experts said that the monetary policies of major international economies have already changed.
currently, the monetary policies of central banks in many developed economies have begun to shift: the european central bank announced on september 12 that it would cut interest rates by 25 basis points for the second time this year; on september 4, the bank of canada started its third consecutive interest rate cut; the bank of england and the reserve bank of new zealand had already implemented their first interest rate cuts in this cycle in august. only japan is an exception. due to rising inflation, the bank of japan has raised interest rates twice this year in the hope of promoting the normalization of monetary policy.
wang qing, chief macro analyst at orient securities:as the monetary policies of major central banks around the world, including the federal reserve, shift, the global economy will switch from the anti-inflation mode of the past two years to a new equilibrium state where inflation and growth are relatively balanced. the pace of global economic recovery may accelerate in the future.
experts said that as the federal reserve begins a cycle of interest rate cuts, the global financial environment will turn to easing, corporate and individual financing costs will fall, and global economic growth expectations are expected to increase, but there are still many uncertain factors that will affect economic growth in the future.
wen bin, chief economist of china minsheng bank:these differences have affected the foresight and stability of the fed's monetary policy to a certain extent. especially in the context of frequent data revisions, the uncertainty of decision-making has further increased, which may trigger an overreaction in the market, shake investor confidence, and cause fluctuations in the financial market. the "expectation management" that the fed has always advocated will also be challenged. in addition, once the fed's judgment on the economic situation deviates, it may lead to delayed or excessive policy actions, thereby exacerbating the risk of economic fluctuations.
source: cctv newsguangzhou daily new flower city editor: su wanqian
