Did the contract brothers make money yesterday? There must be some friends who stayed up all night waiting for a clear signal, and now it has finally come true!
(Reported from Jackson Hole Annual Meeting yesterday) U.S. Federal Reserve Chairman Powell said that "the time has come" for the Fed to cut interest rates because the risks in the job market have risen and there is no room for further weakness, and inflation is close to the Fed's 2% target, which is clearly enough to support the upcoming loose policy.
Now it's just a matter of how much it will be reduced. I'd like to shamelessly ask everyone to vote for me @Square-Creator-48bd49139
Next we continue
Powell sent the clear signal that markets had been waiting for in a much-anticipated speech at the Jackson Hole global central bank symposium in Wyoming on Friday (August 23).
"The time has come to adjust policy," Powell told the gathering of central bank governors and economists. "The way forward is clear and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."
He noted that after inflation surged to around 7% during the COVID-19 pandemic, he had "increased confidence that inflation can return steadily to 2%," while unemployment was rising.
Powell said the nearly full percentage point increase in the unemployment rate over the past year was largely due to an increase in the labor supply and slower hiring, rather than increased layoffs, and he said the "pain" the labor market had to endure to keep inflation in check was now a thing of the past.
The current unemployment rate in the U.S. is 4.3%. The annual inflation rate is 2.9%, the first time since the spring of 2021 that it has not increased by more than 3%.
"We do not seek or welcome further cooling of the labor market," Powell said. "As we make further progress toward price stability, we will do everything we can to support a strong labor market. With appropriate easing of policy constraints, we have good reason to believe that the economy will return to 2 percent inflation while maintaining a strong labor market."
After Powell's speech, at around 10 a.m. Friday Washington time (10 p.m. Friday Singapore time), all three major Wall Street indexes rose sharply.
Rapid price increases have led the Fed to raise its benchmark policy rate from near zero to the current range of 5.25% to 5.50%, where it has remained for more than a year. Powell's latest remarks largely solidify expectations of a rate cut, and reinforce the message from the Fed's July meeting that a "vast majority" of policymakers agreed that rate cuts could begin in September.
The United States will release the August employment and inflation report in early September, followed by the Federal Open Market Committee meeting scheduled for September 17-18, when it will provide the latest economic forecasts and provide more details on how the benchmark policy rate is expected to evolve.
At present, most market investors believe that the Federal Reserve will cut interest rates by at least 25 basis points at the next meeting, lowering the target range to 5% to 5.25%. Some bolder market forecasts even believe that there will be a more aggressive and looser cycle. These market participants predict that the Federal Reserve will cut interest rates by one percentage point before the end of this year, and then cut another percentage point next year. (Morning Post)