How far will the Fed go in the future after raising interest rates by 75 basis points again? Federal Reserve Chairman Powell has made it clear that interest rates will be higher and last longer in the future.

165438+ On June 2, local time, the Federal Reserve raised interest rates by 75 basis points as scheduled at the interest rate meeting in June. 1 1. After raising interest rates, the federal funds rate reached a new target range of 3.75% ~ 4%, the highest level since 2008. At the subsequent press conference, Powell poured cold water one after another, raising the expectation of austerity again. Powell believes that when the policy interest rate rises to 4%, what is more important than the rate of interest rate increase in the future is the height and persistence of interest rate increase. Given that employment and inflation data are still strong, the future interest rate will be higher and interest rates will stay at a higher level for a longer time.

Obviously, Powell is asking the outside world not to underestimate the risk of the Fed raising interest rates continuously. According to Powell's remarks, it is expected that the median expectation of policy makers for the peak interest rate will be raised to 5. 125% at the Federal Reserve's interest rate meeting in June 5438+February. Dove expectations that have led to repeated appearances in the market have also been shattered, which has promoted the double killing of stocks and debts in the capital market. The Nasdaq index fell more than 3% in a single day, and the yield of 10-year US bonds once fell below 4% and rose to 4. 12%. The US dollar index rose and returned to the top of the 1 12 mark.

In fact, judging from the three key indicators concerned by the Federal Reserve, inflation in the United States is still very high. In September, 263,000 non-farm jobs were created in the United States, and the unemployment rate dropped to 3.5%, the lowest level in the past 50 years. The consumer price index (CPI) rose by 8.2% year-on-year, and the core CPI rose by 6.6% year-on-year, the biggest increase in 40 years. The price index of personal consumption expenditure (PCE), the preferred inflation indicator of the Federal Reserve, increased by 6.2% in September. The core PCE index increased by 5. 1% year-on-year, and remained at a high level for nearly 40 years.

However, while the Federal Reserve is further tightening its monetary policy, the US government is constantly expanding its fiscal policy, hoping to stimulate it through industrial policies, substantially increase the consumption of local photovoltaic materials and wind power in the Inflation Reduction Act, support and subsidize the industrial chain of photovoltaic and new energy vehicles, and still maintain a high tariff policy on imported goods.

This "split" macro combination will only make it more difficult for the United States to control inflation, which will greatly reduce the effectiveness of the Fed in fighting inflation by raising interest rates. The high level of the above-mentioned key inflation indicators in the United States has fully demonstrated that a stable interest rate hike path cannot effectively curb high inflation, and even if the interest rate hike is substantial, it has not yet achieved substantial results. Therefore, the Fed has to further postpone the timing of the policy shift, and the interest rate hike front has been significantly lengthened.

The extension of the Fed's interest rate hike will further impact the global economic and financial operation, accelerate the risk exposure of currency exchange rates and capital flows in some fragile economies, and further enlarge the adjustment time and space of global financial markets. Global investors should be highly vigilant and always guard against the risk spillover caused by the Fed's sharp interest rate hike.