Recently, the Federal Reserve raised its benchmark interest rate by 75 basis points to a range of 2.25%-2.50%.This is the second consecutive 75 basis point increase in interest rates.
After the announcement of the Federal Reserve’s interest rate decision, the three major U.S. stock indexes showed little short-term fluctuations.
Spending and production were weak, but job growth was strong.
The Committee is highly concerned about inflation risks.
Be prepared to adjust policies as appropriate.
Inflation remains elevated, reflecting pandemic-related imbalances, rising food and energy prices, and greater price pressures.
The balance sheet reduction will be accelerated as planned in September, with the monthly reduction limit for mortgage-backed securities (MBS) rising to $35 billion,The monthly reduction limit for Treasury bonds will be rose to $60 billion.
The conflict in Ukraine has put additional upward pressure on inflation, affecting global economic activity.
The Committee is firmly committed to returning inflation to its 2 percent objective.
The Fed reiterated that continued interest rate hikes may be appropriate.
Market Comments
Analyst Mohamed El-Erian commented on the Federal Reserve’s interest rate decision: The statement was fully in line with expectations, so the market reaction was muted.
Analyst Ye Xie commented on the Federal Reserve’s interest rate decision: There are only some minor changes in this statement, namely an admission that spending and production have slowed. These are statements of fact and do not move the market.
Analysts commented on the Federal Reserve’s interest rate decision: The FOMC unanimously decided to raise interest rates by 75 basis points at its July meeting, which sent a clear message:The Federal Reserve is still far from declaring that it has defeated inflation. far away. While many fear the U.S. economy is teetering on the edge of recession, Fed officials appear to believe the glass is half full, with a strong job market allowing the U.S. economy to withstand rapid monetary tightening Policy pressure. Analysts believe the Fed is unlikely to pause on raising interest rates later this year as markets currently expect.
Institutional comments on the Federal Reserve’s interest rate decision: This statement on the job market shows that the Federal Reserve now only needs to solve the inflation problem and does not need to balance growth risks. Some point to the recent rise in jobless claims as a sign that the labor market is deteriorating. But the chief U.S. economist at SGH Macro Advisors noted that this may be due to seasonal adjustments. Data occurring in the coming weeks will provide more information when seasonal factors subside. Until the job market slows significantly, it will be relatively easy for the Fed to continue tightening policy.
Institutional comments on the Fed’s interest rate decision: Sarah Hunt, portfolio manager at Alpine Woods Capital, said the Fed saw weakness in the labor market but also saw high inflation data, so the situation is very complicated because a “strong labor market” has been the Fed’s Reasons to speed up interest rate hikes. A slowdown in the labor market may be some of the signs the Fed wants to see, but it also doesn’t want the situation to get too serious.
Institutional comments on the Federal Reserve’s interest rate decision: Omair Sharif, an analyst at Inflation Insights, said that despite the current poor economic conditions, the Federal Reserve’s statement was expected. But he wouldn’t be surprised to see Fed Chairman Powell reiterate that a 50 or 75 basis point rate hike is most likely at the September meeting.
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