Major shift in the Fed's hawkish leaning voting committee: Open to cutting rates by 50 basis points again if employment weakens.
Atlanta Fed President Bostic recently stated that if the upcoming US non-farm data shows slower job growth than expected, he will be open to the Fed cutting interest rates by 50 basis points again. Bostic revealed that in the September dot plot this year, he predicted only one 25 basis point rate cut in addition to the 50 basis point cut in September. Bostic mentioned the standard of non-farm job additions of around 0.1 million.
China and the United States are worlds apart! The Chinese stock market is bouncing back strongly, while US funds are being massively sold off.
On Monday, a total of 5,088 stocks in China's stock market rose, with only 4 stocks falling.
Directly hinting at a rate cut! Lagarde stated that in October, they will consider 'increased confidence in controlling inflation'.
Various signs indicate that the European Central Bank may cut interest rates again by mid-October, just three weeks after lowering policy rates. Two weeks ago, the market was still expecting the next rate cut to be in December. Following changes in market pricing and analyst expectations, Lagarde's statement is undoubtedly a very strong policy hint.
Fed's Quarles: There is a good reason to cut interest rates significantly, dock strikes may disrupt the supply chain.
①Goolsbee stated that, given the current economic situation and its possible direction, he believes the Federal Reserve has reasons to significantly cut rates; ②Goolsbee also mentioned the port strike issue, expressing concern that the dock workers' strike may continue to be prolonged, which could lead to serious supply chain disruptions.
Avoiding the "September curse", the U.S. stock market in October faces economic risks.
After saying goodbye to the September 'curse' in the US stock market, investors expect the US stock market to continue to rise in October. The put/call ratio in the options market has dropped to its lowest level since July 2023, and the s&p 500 index is expected to achieve its best performance in the first nine months since 1997, both showing investors' optimism. However, investors are still paying attention to the upcoming employment report and the actions of the Federal Reserve, as data from the New York Fed and others indicate a higher risk of economic recession in the US in the next year, and uncertainty about the Fed's next steps.
Powell hawkish? Read the full text of the speech and key points of the Q&A in one article.
Powell's speech this time is seen as slightly hawkish. He hinted that the Fed is not in a hurry to cut interest rates, saying that the 'very large' upward revision of personal income announced last week has eliminated the downside economic risks; the U.S. labor market is robust but has cooled significantly over the past year, and the Fed does not need further cooling of this market; if economic developments are in line with expectations, policies will become more neutral over time, with the Fed's basic expectation of two more 25 basis point rate cuts this year; Fed decisions are not pre-determined, but depend on overall data, with most of the data considered for the November meeting still unpublished; decisions will take into account data released during the quiet period; only make decisions during the meeting.