FED STATEMENT & POWELL PRESSER
Policy Section:
- The Fed has cut interest rates by 50 basis points, believing that the dual risks of inflation and employment have become balanced and are no longer biased towards inflation risks.
- Powell expressed confidence in the current policy adjustment and expects that this adjustment can continue to drive economic growth and resilience in the labor market.
- The Fed will continue to reduce its balance sheet, although the interest rate cut will not affect this process.
- Members of the Fed expect two more interest rate cuts this year and four in 2025, with a projected terminal rate of 3.4%, lower than the forecast in June.
- The estimate of the long-term neutral interest rate has been raised from 2.8% to 2.9%.
Economic growth (output):
- The expected GDP growth in the United States in the coming years is 2%.
- The improvement in the supply chain supports stable economic growth, and the interest rate cut helps alleviate supply chain bottlenecks.
- It is expected that stable growth will continue in the second half of 2024, close to the growth rate of 2.2% in the first half of the year.
Employment and consumption:
- Consumer spending remains "resilient", with the labor market cooling but still relatively strong.
- The current labor market is "slightly less tight" than in 2019 and is no longer a major source of inflation.
- It is expected that the unemployment rate at the end of 2024 will rise from the current 4.2% to 4.4%.
Inflation:
- The Federal Reserve maintains a 2% inflation target, with the core PCE inflation rate expected to be 2.3% at the end of 2024, 2.1% at the end of 2025, and the target is to decrease to 2% by 2026.
This statement expresses the Federal Reserve's optimistic view of the current economic situation, believing that policy adjustments are timely and necessary to address future economic challenges. $MRCB (1651.MY)$
- The Fed has cut interest rates by 50 basis points, believing that the dual risks of inflation and employment have become balanced and are no longer biased towards inflation risks.
- Powell expressed confidence in the current policy adjustment and expects that this adjustment can continue to drive economic growth and resilience in the labor market.
- The Fed will continue to reduce its balance sheet, although the interest rate cut will not affect this process.
- Members of the Fed expect two more interest rate cuts this year and four in 2025, with a projected terminal rate of 3.4%, lower than the forecast in June.
- The estimate of the long-term neutral interest rate has been raised from 2.8% to 2.9%.
Economic growth (output):
- The expected GDP growth in the United States in the coming years is 2%.
- The improvement in the supply chain supports stable economic growth, and the interest rate cut helps alleviate supply chain bottlenecks.
- It is expected that stable growth will continue in the second half of 2024, close to the growth rate of 2.2% in the first half of the year.
Employment and consumption:
- Consumer spending remains "resilient", with the labor market cooling but still relatively strong.
- The current labor market is "slightly less tight" than in 2019 and is no longer a major source of inflation.
- It is expected that the unemployment rate at the end of 2024 will rise from the current 4.2% to 4.4%.
Inflation:
- The Federal Reserve maintains a 2% inflation target, with the core PCE inflation rate expected to be 2.3% at the end of 2024, 2.1% at the end of 2025, and the target is to decrease to 2% by 2026.
This statement expresses the Federal Reserve's optimistic view of the current economic situation, believing that policy adjustments are timely and necessary to address future economic challenges. $MRCB (1651.MY)$
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