2023-06-08 12:26:58
He said that the decline in inflation is less than expected
Habib Akiki, the chief market strategist at Tradepedia, ruled out that the Federal Reserve would surprise at its next meeting by raising interest rates.
Akiki added, in an interview with Al-Arabiya, that several factors support that the Federal Reserve will wait and not raise interest rates this month, explaining that the central banks in Australia and Canada had reasons to raise interest rates, including the return of inflation rates to rise once more, and the improvement of growth rates as well, and this is what prompted them. To raise interest following a long pause, the Canadian Central Bank has stopped raising interest rates since January 2023, and the Australian Reserve also slowed down a period as well.
With a look at the general scene in the United States, following contraction for six consecutive months in the industrial sector, the PMI in the services sector showed calm in the sector that accounts for 75% of US GDP, and there are signs of inflation declining at a faster rate than expected, and the price sub-index within the PMI Purchases in the services sector declined this month, as did wage rates, and these are signs of a decline in inflation and therefore the Fed will not raise interest rates, especially with several sectors of the US economy negatively affected by the interest rate hike, according to Akiki.
He said that the last test for the dollar before the Federal Reserve meeting next Wednesday is the inflation figures that will be issued on the previous Tuesday, and if the general and basic consumer price index declines, this will raise the possibility of waiting and not raising interest rates at the next meeting, and then the dollar will weaken, but if price pressures rise The dollar will rise with the growth of expectations of higher interest rates, and the Fed will make its decision according to economic data, which so far indicate that there is no urgent need to increase interest rates.
He continued, “If we see an improvement in growth, and the labor market shows more strength than what appeared in the recent period, the Fed may return to raise interest rates, but even the decision to raise in July is not certain.”
He explained that inflation rates in the euro area are still very high than the target, and if they are declining, they are still the highest among other economies, and growth rates have begun to weaken slightly, but the continuation of inflation at these levels will prompt the European Central Bank to raise interest rates at least twice before stopping the monetary tightening cycle. .
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