The US Federal Open Market Committee’s (FOMC) observations of an unprecedented one-point policy rate hike in July have receded due to two officials’ remarks and economic statistics showing lower inflation expectations.
Atlanta RenginBostic was reluctant to raise rates on the 15th.On another occasion, the St. Louis Federal Reserve Bank of St. LouisGovernor Bullard refrained from mentioning this month’s FOMC. In an interview with the Nihon Keizai Shimbun the day before, he said he would support a 75 basis point (bp, 1bp = 0.01%) rate hike, although the consumer price index (CPI) was very high in June. Was shown.
Shortly after the two governors spoke, consumersLong-term inflation expectations fell more than expected in early July, according to statistics from the University of Michigan Consumer Mind Index. The probability of a 1-point rate hike in July, which the interest rate futures market is currently factoring in, is about one-sixth. A 0.75 point rate hike is definitely factored in.
Long-term inflation expectations of U.S. consumers low for the first time in a year-University of Michigan Index (1)
Governor Bullard attended the virtual event on the 15th, saying the FOMC needs to raise the policy rate to the 3.75-4% range instead of 3.5% by the end of the year. This suggests an additional rate hike of about 2.25 points in total.
“It’s a matter of thinking about what the best strategy is,” he said, regarding the rate hikes to be decided at the rest of the year.
Bullard supports rate hike to 3.75-4% by the end of the year-pacing at multiple meetings
US CPI (upper row is year-on-year, lower row is month-on-month)
Source: US Bureau of Labor Statistics
Bostic said in a speech in Tampa, Florida that inflation was too high and that financial authorities intend to control it, but suggested that he would not support a one-point rate hike in July.
“Too abrupt behavior will prevent many other events from functioning well,” Bostic said. “My goal is to try to repair the non-functional parts while minimizing the side effects that can affect other parts of the economy,” he explained. He said he disagrees with the aggressive rate-raising groups within the Atlanta Federated Bank.
Atlanta Fed President suggests not supporting a 1-point rate hike at July meeting
The Federal Reserve Board (FRB) board member supported a 0.75 point rate hike the day before, but also supported more aggressive action if upcoming economic data showed further inflation risk. He said he would get it.
Original title:Fed’s Chances of Full-Point Hike Recede on Data, Wary Officials（抜粋）
