It not only released the expectation of a weaker rate increase, but also stunned the market.
$Tesla(TSLA.US$How to interpret the results of the Fed's November interest rate meeting?
The resolution of the Fed's November interest rate meeting, which attracted a lot of attention in the early hours of yesterday morning, continued to raise interest rates by 75 basis points in November.
Although this is the fourth consecutive major interest rate hike this year, the market has already accepted the November rate hike. At the same time, the resolution also hinted at a dove turn, saying that "the cumulative tightening of monetary policy, the lag of monetary policy affecting economic activity and inflation, and economic and financial development will be considered", meaning that it depends on whether so much will be added later. This was interpreted by the market as a hint of doves, so after the announcement of the meeting resolution at 2: 00, US stocks continued to rise.
But the turning point came at the 02:30 press conference. Powell expressed a tough position at the press conference, stressing that do not care about the speed of interest rate increases, the focus of interest rate increases has been lasting is a more noteworthy issue, stressed that it is too early to consider to stop raising interest rates. And Powell re-emphasized the inflation target, stressing that terminal interest rates would be higher than previously expected. The final end of the rate hike was expected to end at 4.6 per cent in September, but rose to 5-5.25 per cent after Mr Powell's speech. This higher-than-expected result caused the market to turn down again to a hawkish position.
So on the whole, through a series of actions, although the Fed hinted at a marginal decline in the rate hike in December in the results of this meeting, affirming the market's previous expectations, it also put forward two viewpoints of sustainability and absolute value. to restore the hawkish stance to the market. Although it has achieved the effect of stopping the rate increase, it can still deter the market, and is worthy of the expectation management master.
The resolution of the Fed's November interest rate meeting, which attracted a lot of attention in the early hours of yesterday morning, continued to raise interest rates by 75 basis points in November.
Although this is the fourth consecutive major interest rate hike this year, the market has already accepted the November rate hike. At the same time, the resolution also hinted at a dove turn, saying that "the cumulative tightening of monetary policy, the lag of monetary policy affecting economic activity and inflation, and economic and financial development will be considered", meaning that it depends on whether so much will be added later. This was interpreted by the market as a hint of doves, so after the announcement of the meeting resolution at 2: 00, US stocks continued to rise.
But the turning point came at the 02:30 press conference. Powell expressed a tough position at the press conference, stressing that do not care about the speed of interest rate increases, the focus of interest rate increases has been lasting is a more noteworthy issue, stressed that it is too early to consider to stop raising interest rates. And Powell re-emphasized the inflation target, stressing that terminal interest rates would be higher than previously expected. The final end of the rate hike was expected to end at 4.6 per cent in September, but rose to 5-5.25 per cent after Mr Powell's speech. This higher-than-expected result caused the market to turn down again to a hawkish position.
So on the whole, through a series of actions, although the Fed hinted at a marginal decline in the rate hike in December in the results of this meeting, affirming the market's previous expectations, it also put forward two viewpoints of sustainability and absolute value. to restore the hawkish stance to the market. Although it has achieved the effect of stopping the rate increase, it can still deter the market, and is worthy of the expectation management master.
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