Author introduction: Master of micro-stock power – Baozhen Investment Consultant.treasury housekeeper
Following the FOMC meeting in the early hours of Nov. 3 Taiwan time, the US Federal Reserve (Fed) announced another 3 meters of interest rate hikes, roughly in line with market expectations. the terminal interest rate could be higher than expected, which also means the Fed is determined to fight inflation even as the economy enters a recession.
Over the course of this year, the Fed has announced a total of 6 interest rate hikes, cumulatively raising interest rates by 15 yards (375 bp) and raising the key interest rate by 75 basis points at a range between between 3.75% and 4.00%, setting a new high since 2008. Regarding December rate hike stance, the Fed predicted at its September meeting that it would raise interest rates by 2 yards in December, and the terminal interest rate will reach 4.4%, and next year it will reach 4.6%.
According to the Chicago Mercantile Exchange’s FedWatch tool, federal funds futures investors expect a 47.2% chance of a 2-DM rate hike in December and a 52.8% chance of a 3-DM rate hike .
As for the future economic outlook, Powell believes that the current inflationary pressure is easing rather slowly. Judging by the annual growth rate of the US consumer price index (CPI) in September at 8.2% , higher than 8.1% of the market, the annual core CPI growth rate rose sharply to 6.6%, not only higher than August’s 6.3%, but also reached a 40-year high , which also means that inflationary pressure in the US is still quite high. Moreover, the strong growth in the labor market and the low unemployment rate in recent months have also pushed up the wage level in the labor market. The Fed is determined to keep the inflation rate around 2% for a long time , which may require more determination and patience.
If inflationary pressure cannot be eased, the Fed will not rule out more aggressive interest rate hikes and tighter monetary policy in the future, which will reduce the chances of a soft landing. meetings will slow down, the answer given so far is still unknown. Therefore, considering the market turmoil caused by the interest rate hike, in terms of investment operations, it is recommended to choose companies with good physicality, solid fundamentals and future prospects!
Author introduction: Master of micro-stock power – Baozhen Investment Consultant. treasury housekeeper 【Follow now】
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