According to foreign media reports on Thursday (25th), Kansas Federal Reserve Bank President Esther George (Esther George), a voting member of the Federal Open Market Committee (FOMC) this year, said in an interview a few days ago that until there is evidence that inflation is falling, the Fed is expected to The Federal Reserve will continue to raise interest rates because they are not currently at “restrictive” levels and there is still “room for upside.” On the eve of the annual meeting of global central banks in Jackson Hole, several Fed officials took a hawkish stance.
When George was asked how much the Fed would raise rates, she said “there’s more room” and dismissed financial market bets that the Fed will start cutting rates next year and instead keep raising rates, when the policy rate could rise above 4%.
George’s remarks paved the way for the Fed’s talks in the next two days. Fed Chairman Powell will speak at the annual meeting of global central banks in Jackson Hole tomorrow (26th), and it is expected that it may reiterate that it may continue to tighten monetary policy. Inflation determination.
At the same time, Atlanta Federal Reserve Bank President Raphael Bostic expressed similar views in an interview a few days ago. Postik believes the Fed still has some way to go in raising interest rates and warned that it is too early to say inflation has peaked.
As for the size of the Fed’s rate hike in September, Bostic said he has not yet made a judgment, saying that he is still swinging between a decision to raise rates by two yards (50 basis points) and three yards (75 basis points).
In addition, Bostic also mentioned that there are still non-farm payrolls and inflation reports to be released before the next meeting. If the data is strong and inflation remains high, the Fed will have reason to raise interest rates by 3 yards. And Bostic also predicts that the Fed will complete interest rate hikes this year, and the policy rate range will rise from the current 2.25%-2.5% to 3.5%-3.75%, which is in line with St. Louis Federal Bank President and the most hawkish Fed official Brahma German (James Bullard) coincides.
Bullard said last Thursday that he was leaning toward a three-point rate hike in September, the same day San Francisco Fed President Mary Daly said the Fed should raise interest rates “slightly” above 3 percent by the end of the year to cool inflation. Minneapolis Federal Reserve Bank President Neel Kashkari also expressed a hawkish stance on Tuesday, arguing that the Fed will continue to raise policy rates by the end of next year, adding another two percentage points to the current basis.
The expectation of most Fed officials is that the Fed will raise interest rates for the third time by 3 yards at the September interest rate decision, and interest rates will rise by at least one percentage point by the end of this year.
Before the deadline, according to data from the CME Group FedWatch Tool, the probability of a rate hike of 2 yards at the September meeting was 39.5%, and the probability of a rate hike of 3 yards was 60.5%.