Reporters reported that The Dow Jones Industrial Average fell more than 200 points. in the midst of concern that The US Federal Reserve (Fed) may raise interest rates by 0.75% for the third time at its September monetary policy meeting. This might cause the US economy to face a recession.
In addition, the market is concerned regarding the Chinese economy. After Mr. Li Keqiang, Prime Minister of China said to admit China is in the most difficult situation to stabilize its economy.
At 9:20 p.m. Thai time, the Dow Jones Industrial Average stood at 33,758.32 points, minus 240.72 points, or 0.71%.
The tech stocks fell today. By being pressured by the rebound in US government bond yields. Meanwhile, banking stocks fell as well. After 6 weeks in a row
However, investors became skeptical regarding the prospect of the Fed’s policy rate hike at its September meeting.
However, the latest Expectations for a rate hike of 0.50% and 0.75% at the September monetary policy meeting are approaching 50-50 following investors previously weighed in on the Fed’s rate hike of just 0.50. %
As the CME Group’s FedWatch Tool now indicates, Investors weighed 53.5 percent that the Fed would raise interest rates 0.50% to 2.75-3.00% at its meeting on Sept. 20-21, and weighted 46.5% that the Fed would raise interest rates by 0.75%.
previously Investors weighed 68.5 percent that the Fed would raise interest rates by 0.50% at its Sept. 20-21 meeting, and weighted only 31.5% that the Fed would raise interest rates by 0.75%.
If the Fed raises interest rates by 0.75% in September, it will raise interest rates by 0.75% for the third time following raising 0.75% in both June and July.
St. Louis Fed Chairman James Bullard said the Fed should raise interest rates by 0.75% at a monetary policy meeting in September. As the US economy continues to be strong
“I don’t see a reason why we have to delay the rate hike until next year. The Fed should raise its interest rate target to 3.75-4.00% by the end of the year,” Bullard said.
Bullard’s remarks were consistent with statements made by San Francisco Fed President Mary Daly. This encouraged the Fed to raise interest rates by 0.50% or 0.75% at its September meeting.
Meanwhile, investors around the world are keeping an eye on the Fed’s annual meeting in Jackson Hole, Wyoming, on Aug. 25-27, in anticipation of the Fed’s clearer signal on the US economy. interest rate direction including the Fed’s balance sheet (QT) reduction amid concerns regarding inflation.
The theme for this year’s conference is “Reassessing Constraints on the Economy and Policy,” with Fed Chairman Jerome Powell giving a speech on Aug. 26 at 10 a.m. US time. 21:00 Thai time
However, in a previous statement to Congress Mr Powell said The Fed is committed “Unconditionally” to maintain price stability This indicates that the Fed is ready to take on the risks that may arise. so that the economy can avoid the dire situation of uncontrollable inflation causing long-term damage.
There are concerns that the Fed’s rate hikes will put the US economy on the brink of a recession. Meanwhile, the US Commerce Department said the US economy contracted 0.9% in the second quarter following a 1.6% contraction in the first quarter. put the US into a technical recession.
Mr Powell confirmed that He doesn’t think the US economy is going into recession. Because many sectors in the economy are still strong. This includes the labor market.
For the meeting in Jackson Hole is a meeting that has received a lot of attention. by central bank governors, finance ministers, academics and financial experts from countries around the world will travel to attend the meeting While the highlight will be at the then-Fed chair’s speech expressing his vision of the Fed’s monetary policy. and the US economic outlook