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CNY/USD News
Dovish Federal Reserve officials: Inflation has significantly decreased and a moderate rate cut is expected next year.
① The Chicago Federal Reserve Chairman Goolsbee stated on Friday that he slightly lowered his forecast for next year's interest rate cuts but still expects the Federal Reserve to moderately cut rates next year; ② As a dovish official, Goolsbee will replace Cleveland Federal Reserve President Harmack next year and become a new voting member of the Federal Open Market Committee (FOMC).
Oil prices have dropped by 2.5%! With the Federal Reserve's interest rate hike expectations conflicting with demand, what will the future trend be?
This week, the international crude oil market closed stable, with Brent crude oil Futures rising by 0.08% to $72.94 per barrel, while WTI Crude Oil Futures increased by 0.12% to $69.46 per barrel. For the week, the two major Indicators of crude oil Futures cumulatively dropped by about 2.5%. The market is weighing the expectations of interest rate cuts in the USA and the demand outlook, while the dollar's pullback has provided some support for the crude oil market. The cooling of inflation in the USA has led to a softening of the dollar, which theoretically is Bullish for crude oil prices. However, the hawkish signals released by the Federal Reserve after the year-end meeting have weakened market expectations for significant rate cuts in 2025. Although the dollar has retreated from two-year highs,
The only official who voted against at the Federal Reserve's December meeting explains: Why is there no support for lowering interest rates? (Full text attached)
Federal Reserve Chair Hammack indicated that based on her determination that monetary policy is currently close to a neutral stance, she tends to keep policy stable until more evidence shows that inflation is returning to the target path of 2%. The momentum of the USA economy and the recent high inflation data prompted her to raise the inflation forecast for next year. She believes her decision is a tough choice.
Overview of opinions: After the Federal Reserve cut interest rates by 25 basis points, the Fed chairman made several statements.
After the Federal Reserve made its latest interest rate decision this week, several officials voiced their insights on outlook and inflation issues intensively on Friday. San Francisco Fed President expects fewer rate cuts next year than anticipated. Daly feels "very comfortable" with the median estimate of two rate cuts next year. Mary Daly, President of the San Francisco Federal Reserve Bank, stated that she is "very comfortable" with the median estimate of the decision-makers for two rate cuts next year, emphasizing that the Federal Reserve can shift to a slower pace. Chicago Fed President raises rate outlook but still expects lower borrowing costs. Austan Goolsbee, President of the Chicago Fed, mentioned that he slightly raised his rate outlook for 2025, but...
The Federal Reserve's "third-in-command": It is expected that interest rate cuts will continue in the future and considerations have begun regarding the impact of Trump's policies.
①Williams stated that he expects the Federal Reserve to implement more interest rate cuts, but the decision on rate cuts will depend on subsequent data, as monetary policy still suppresses economic growth momentum; ②Williams acknowledged that the impact of Trump's policy agenda has begun to influence his economic outlook.
Multiple Federal Reserve officials support relying on data for cautious interest rate cuts next year, while Powell's "dovish allies" rarely make hawkish statements.
Analyses have pointed out that although San Francisco Fed Chair Daly and New York Fed Chair Williams both acknowledge that interest rate cuts will continue next year, they also stated that there is no rush to lower rates. All Federal Reserve officials emphasized the importance of data and acknowledged the uncertainty in the outlook. However, the Chicago Fed President, who will be a voting member next year, made more dovish comments, believing that inflation is still cooling and that interest rates need to be significantly lowered within a year and a half, which boosted U.S. stocks to open low and rise high while Treasury yields fell.
The Federal Reserve has entered a new phase of MMF policy, with various signals being released by local Federal Reserve Chairs.
Several regional Federal Reserve Bank presidents spoke after the Federal Open Market Committee (FOMC) announced a rate cut in December.
All of the Federal Reserve's favorite inflation Indicators fell below expectations, with the USA's core PCE in November rising at the smallest rate since May.
In November, the PCE price Index in the USA grew by 2.4% year-on-year, lower than the expected 2.5%, but the highest since July; after excluding the more volatile food and Energy, the core PCE price Index in November increased by 2.8% year-on-year, remaining the same as the previous value, and grew by 0.1% month-on-month, marking the lowest since May. The 'New Federal Reserve News Agency' stated that both the overall PCE and core PCE showed moderate performance in November, however, the data would not constitute 'news' for the Federal Reserve, as it is possible to make fairly reliable predictions of personal consumption expenditures (PCE) if the PPI, CPI, and import prices of a certain month are known.
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The Federal Reserve has cut interest rates again. HSBC Hong Kong and HANG SENG BANK have lowered the interest rates for personal dollar products. Has the yield on dollar wealth management products reached a turning point?
① The Federal Reserve has recently cut interest rates again, and the returns of dollar financial products and the performance benchmarks of newly issued products may decline in the future. Some Financial Institutions have lowered the fixed deposit rates for dollar products, but there is still an interest margin advantage compared to RMB products. ② Industry experts point out that the turning point for individual dollar products will depend on the sustainability of the Federal Reserve's rate cuts and changes in market confidence towards dollar Assets.
US Dollar Hits Fresh Two-year High Ahead of PCE Inflation
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DXY: All Eyes on the Core PCE Report – OCBC
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Forex Today: Fed-inspired USD Rally Pauses, Eyes on PCE Inflation Data
The US dollar is skyrocketing, Exchange Rates are volatile, and Emerging Markets central banks are ready to intervene at any time.
The strong US dollar is wreaking havoc in the Global market, with the MSCI Emerging Markets MMF Index having fallen 3.3% since the end of September. Emerging Markets' central banks are preparing to intervene: South Korea will relax the banks' Forex forward position limit by 50% to promote Inflow; the Brazilian central bank has spent nearly 14 billion USD in the past week to support the real; the Indonesian central bank has vowed to firmly defend the rupiah to boost market confidence...
The "last mile" challenge of inflation reappears, will central banks in Europe and the United States only slowly reduce interest rates in 2025?
The USA PCE price index has rebounded year-on-year for two consecutive months, and the United Kingdom CPI inflation has also jumped from 1.7% in September to 2.6%, exceeding the target level of 2%. Currently, traders expect the Federal Reserve to cut interest rates once next year, with a 50% probability of a second rate cut, whereas a month ago, expectations were for two rate cuts; it is anticipated that the Bank of England will cut rates twice next year, a decrease from the four rate cuts expected in October.
USD Likely to Perform Well in 2025 -- Market Talk