US stocks front line ｜ Powell Jackson Hall's annual meeting made the pigeon "dream broken", the three major stock indexes of the US stock index plummeted, and the 75 base point was expected to rise in September

The 21st Century Business Herald reporter Li Yinong Shanghai reported that the Federal Reserve Chairman Powell's "Eagle School" speech at the Jackson Hall conference completely crushed the investor's expectations for the central bank's pigeon. Affected by this, global risk aversion suddenly heated up, and the US stock market was sold violently.

The three major US stock indexes dived sharply after Powell's speech, and the entire line plummeted. As of the close of the 26th, the Dow fell 3.03%to 32283.4 points; the S & P 500 index fell 3.37%to 4057.66 points; the Nasda Index fell 3.94%to 12141.71 points.

Analysts generally point out that although the market has had some expectations of Powell's tough stance before, some investors are still optimistic that the Fed's radical rate hikes will slow down, and Powell's statement at the meeting is completely broken. This expectation.

Powell's remarks show that although the inflation data in July shows that the rise in price may have been controlled, it is still not enough to make the Federal Reserve's possibility of 75 basis points in interest rate hikes; at the moment, the market pricing Fed in the short -term tightening steering stadium will be released in the short term Slowing and monetary policy is about to turn.

Powell firmly puts the "eagle"

At the Annual Conference of the Central Bank of Jackson Hall, which attracted much attention from investors, Powell made a severe and firm commitment on curbing inflation, reiterating the Fed's determination to increase inflation and raising interest rates.

Powell believes that although the Federal Reserve has raised interest rates 4 times in a row and has accumulated a total of 225 basis points, there is still "no room to stop or suspend interest rate hikes." Powell emphasized that stable prices are the duties of the Fed and the cornerstone of the US economy. He said that the Fed will continue to "use our tools to use our tools" to cope with inflation that is still hovering near more than 40 years.

Powell bluntly stated that the Fed is expected to raise interest rates in a way that will bring "some pain" to the US economy, because the slowdown in economic growth and the weak employment market will lower inflation. He said that this is the unfortunate price of reducing inflation; but at the same time, it emphasizes that if the price stability cannot be restored, it will mean that American families will face "greater pain".

The Fed is using historical experience as the guidance of the current policy. Powell specifically pointed out in his speech that inflation 40 years ago provided meaningful reference value for the current Fed. In the 1970s, the Federal Reserve failed to take timely action, led to long -term existence of high inflation expectations. As a result, the restrictive monetary policy existed for a long time in the early 1980s, dragging the economy into decline.

Powell said (the Federal Reserve) goal is to avoid this result through a firm action now. He said, "We are taking powerful and rapid measures to ease demand in order to better consistent with the supply and keep inflation expectations stable. We will persist until we have confidence to complete this work."

Powell's speech at the central bank's annual meeting this time is very straightforward. Related analysis pointed out that while the Fed and Powell faced how to control inflation and avoid the huge challenges of excessive impact on the economy and the employment market, the speech aims to consolidate the reputation of the Fed and Powell itself, ensure that the financial market and the United States believe in the Federal Reserve It will not cause inflation to be more out of control. Especially at the beginning, the Federal Reserve had misjudged this round of inflation, saying it was only "temporary." Right now, we need to make every effort to strive for trust to avoid long -term inflation expectations become "deep -rooted."

September interest rate hike expectation to 75 basis points tilt

After Powell's statement, the market's expectations for interest rate hikes in September have been biased towards 75 basis points.

According to the latest data of the Chicago Commodity Exchange Fedwatch, as of press time, the market expects to raise interest rates in September to 75 basis points from 47%a week ago to 61.5%; The probability of slow) was reduced to 38.5%.

Powell said at the meeting that the scale of interest rate hikes in September depends on the "overall" data. He pointed out that the inflation data in July is welcomed, but it is not enough to make the Federal Reserve believe that inflation is declining; the Fed's attention is not only one or two months of data, the policy will continue to advance until the inflation rate will return to nearly 2%. Long -term goal. Powell emphasized that it should not be "prematurely" to relax the policy based on history; at the same time, it is said that to some extent, as the policy position is further tightened, it will be appropriate to slow down the pace of interest rate hikes.

Cleveland Federal Reserve Chairman Mest pointed out that Powell conveyed a very strong message that the Fed will be committed to letting inflation levels fall to the target level. At the same time, Mest also believes that it is necessary to increase interest rates and maintain a level of more than 4%, until you see more convincing data, indicating that inflation is declining. Mest expects that the economy will not decline, but the economic growth rate is lower than the trend.

Judging from the recent statements, Fed officials generally have an open support attitude towards 75 basis points in September.

Atlanta Federal Reserve Chairman Bostek said that there is still a way to go on the interest rate hike road this year, and reminded that it is too early to determine that inflation is over and began to consider interest rate cuts. Bostek pointed out that there will be key employment and inflation reports before the September meeting, which will provide more basis for the Federal Reserve decision makers. Bostek also believes that the federal fund interest rate is expected to reach a limited interest rate level of 3.5%-3.75%before the end of the year, which means that 125 basis points are needed to raise interest rates within the year.

Dali, the chairman of the San Francisco Fed, has repeatedly reiterated that "50 basis points or 75 basis points in interest rate hikes in September are reasonable."

Philadelphia Fed Chairman Hak pointed out that inflation expectations out of control are the number one risk; the Fed must take a restrictive position in an orderly manner to control all efforts to control inflation. He believes that controlling inflation may exacerbate the risk of recession, but even if the economy falls into decline, it will be temporary.

It is worth noting that in terms of macroeconomic data, the US Economic Analysis Administration announced on the 26th that the US PCE price index rose 6.3%year -on -year in July, slightly lower than the expected 6.4%, and the previous value rose 6.8%; It is the same as expected; the core PCE price index rose 4.6%year -on -year, the minimum increase in October 2021, below the expected increase of 4.7%; the month -on -month increase of 0.1%, the minimum increase in February 2021. Data show that the rise in prices in July has slowed down.

In addition, the US expenditure in July rose 0.1%month -on -month, the minimum increase in December 2021, which was lower than the expected rising 0.4%.

At the same time, the final value of the consumer confidence index of the University of Michigan, which was announced on the same day, recorded 58.2, which was higher than the expected 55.2, which was heated from the previous value of 55.1 in July.

On the one hand, the data announced this time is more optimistic. The PCE index further shows inflation or signs of the top, superimposed to the consumer confidence index that is better than expected, or will ease the concerns of Powell's eagle statement to a certain extent. However, on the other hand, the recovery of the confidence index and the decline of inflation have not yet obviously giving the Fed's policy space and reasons to continue to maintain a tightening pace.

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