Author’s introduction: Micro-stock power master – Baozhen Investment Consultant.treasure housekeeper
After the FOMC meeting in the early hours of November 3, Taiwan time, the US Federal Reserve (Fed) announced another 3 yards of interest rate hikes, which was roughly in line with market expectations. It will not stop raising interest rates too soon and the terminal interest rate may be higher than expected, which also means that the Fed is determined to fight inflation even if the economy enters recession.
Throughout this year, the Fed announced a total of 6 interest rate hikes, accumulatively raising interest rates by 15 yards (375 bp), and raising the benchmark interest rate by 75 basis points to a range of 3.75%~4.00%, setting a new high since 2008. Regarding the rate hike attitude in December, 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%, while next year it will reach 4.6%.
According to the Chicago Mercantile Exchange’s FedWatch tool, investors in fed funds futures predict a 47.2 percent chance of a 2-mark rate hike in December and a 52.8 percent chance of a 3-mark rate hike.
Regarding the future economic outlook, Powell believes that the current inflationary pressure is easing quite slowly. Judging from the annual growth rate of the U.S. consumer price index (CPI) in September at 8.2%, higher than the market’s 8.1%, the core CPI annual growth rate has risen sharply To 6.6%, not only higher than 6.3% in August, but also hit a 40-year high, which also means that the US inflation pressure is still quite high. In addition, the strong growth of the job market and the low unemployment rate in recent months have also pushed up the salary level in the job market. The Fed is determined to keep the inflation rate at around 2% for a long time, which may require more determination and patience.
If the inflationary pressure cannot be relieved, the Fed will not rule out adopting more aggressive interest rate hikes and stricter monetary policy in the future, which will lead to a reduction in the chance of a soft landing. Whether the next regular meeting or future regular 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 physique, solid fundamentals and future prospects!
Author’s introduction: Micro-stock power master – Baozhen Investment Consultant. treasure housekeeper 【Follow now】
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