The United States Federal Reserve announced the maintenance of the federal funds at 3:00 am Beijing time on Friday (November 9)interest rateThe target range of 2.00%-2.25% is unchanged, which is in line with the general expectations of the previous market. After the meeting, there was neither a press conference scheduled nor a new forecast, and no need to modify the economic assessment. The focus of this focus is basically on the Fed’s statement.
The Fed’s resolution statement shows that it is expected to “further incremental interest rate hikes”. FOMC voted unanimously to maintaininterest rateconstant. Reaffirming that the risks facing the US economic outlook “appear to be roughly balanced”.
At the same time, the policy statement also decided to maintain the excess reserve rate unchanged at 2.20% and maintain the discount rate unchanged at 2.75%.
Information received since the last meeting of the Federal Open Market Committee (FOMC) in September shows that the labor market continues to strengthen and economic activity has been growing strongly; in recent months, employment growth has been strong and unemployment has declined; household spending Continue strong growth, while corporate solidFixed investmentThe growth of capital has slowed down.
The Fed policy statement shows that in the past 12 months, the overall inflation rate and inflation rate of items other than food and energy have remained around 2%, and long-term inflation indicators have generally changed little.
The Fed reiterated that the recent economic risks are “roughly balanced” and the federal funds rate will gradually increase, which is in line with the expectation that the economic activity continues to expand, the labor market is strong, and the medium-term inflation rate is close to the symmetrical target of 2% of the committee.
On the issue of determining the timing and scale of future adjustments to the federal funds rate target range, the policy statement will show that the realized and expected economic conditions associated with its maximum employment target and the symmetric 2% inflation target will be assessed. The assessment will take into account broad data information, including labor market conditions, inflationary pressures and inflation expectations, as well as financial and international development data.
It is worth noting that the Fed resolution tonight will be the last meeting without a press conference. Federal Reserve Chairman Powell promised that since December, the Federal Reserve will hold a press conference after eight regular policy meetings each year. Powell has said that he wants to let the public know more about the Fed's work and to be more concise and understandable when talking about it. This is part of his role as the Fed chairman.
The Fed’s interest rate hike cycle began in 2015, and the frequency of interest rate hikes for each of the two interest rates has been maintained since 2017 (four interest rates in the second half of 2017 only raise interest rates once). This interest rate is again in the middle of two interest rate hikes (between the September rate hike and the December rate hike).
Westpac said that the Fed will continue to pay attention to the economic performance of 2018. The performance of interest-sensitive industries is unlikely to worry the Fed, as the Fed’s policies remain relatively loose. The same is true of the recent stock market, and US stocks are still at a high level.
As support for economic growth fades, fiscal policy will become a problem in the second half of 2019.
The recently released economic data basically supports the Fed to continue raising interest rates. The number of US initial jobless claims announced last week fell slightly by 1,000 to 214,000, slightly higher than market expectations, near historical lows, indicating that the job market remained strong. The average volatility of the first-time unemployment benefits fell by 250 to 21.375 million. In addition, the number of jobless claims for the week of October 27 fell by 8,000 to 1.62 million, the lowest level since July 1973.
In the non-agricultural report released last week, the unemployment rate stabilized at 3.7%, while the hourly wage increased by 3.1% year-on-year, the highest salary increase in the cycle.