FOMC results are out!
Good morning!
The FOMC results are out.
The market was so optimistic that Chairman Powell made an angry hawkish statement.
Interest rates have been raised 2 times with 4 meetings remaining, and there are no further interest rate cuts within the year.
Will the market continue to be optimistic though 🧐
・ “If there was not much improvement in core PCE inflation over the past six months, the content was more hawkish than expected.” and Chairman Powell
・From the viewpoint that the content of the CPI is still bad, and the PCE core remains high, Mr. Powell is worried.
・Interest rate hikes have been postponed this time, but the dot plot was revised upward from 5.125% to 5.625%, and furthermore, it was revised upward one after another from 4.25% to 4.625% and 3.125% to 3.375% in 2025.
・It is necessary to continue to scrutinize the contents rather than the numerical values of the indicators in the future, and in particular, be aware that there is a possibility that it will move more than imagined when the next PCE is announced.
・The market is still optimistic, but the longer the optimism lasts, the greater the shock.
・Considering that the market price that took into account interest rate hikes in July did not include interest rate hikes after that, I think you can see what kind of developments will take place in the future.
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