Source: Taiwan Economic Daily
Economic Daily Theory
The Federal Federal Federal Public Marketing Committee (FOMC) decided to maintain interest rates on the 20th, 5.25-5.50%, but it is predicted that this year will raise interest rates again."Eagle factions", these are all expected, not different.There are two changes worth paying attention to.One is that most decision -making officials have reduced interest rate cuts from four yards to two yards for 2024, further showing that the Fed intends to make interest rates "maintain a longer level at a higher level (Higher for Longer);Economic predictions show that decision -making officials are more confident in the economic reaching "Soft Landing".The former should be appropriate, but the latter is slightly optimistic.
According to the latest interest rate prediction "dot -matrix chart", most officials will reduce the interest rate reduction rate of next year's estimated estimates from four yards to two yards, and the interest rate forecast value in 2025 and the estimated value of "neutral interest rate"It is much higher than the actual water level before the epidemic.This shows that the Fed's cautious view of the speed of inflation has also means that the era of ultra -low interest rates has become the past.Because the Fed's confrontation with inflation has entered the "difficult last mile", it is now holding a firm position of "rather than fault, not to loosen", which can be said to be both appropriate, necessary, and insurance.
Another signal worthy of attention is that in the latest economic forecast, it shows that Federal Reserve decision officials are more confident to reach a soft landing.Officials have greatly increased the economic growth rate this year from 1 to 2.1%, and the unemployment rate at the end of the year will be repaired from 4.1%to 3.8%; the estimated economic growth rate in 2024 will be repaired from 1.1%to 1.5%.4.5%renovated to 4.1%, proved that officials did not think that the risk of economic recession next year was very high.Powell also said that although the economy can "soft landing" is not his basic view, there is still a way to reach.
But to achieve "soft landing", two conditions must be available."Landing" is a prerequisite, that is, the inflation is near the target of 2%; as for "soft", when the inflation is reached, the economy has not fallen into decline, but this is not an inevitable situation when the economy "landing".If in order to reach a "landing", high interest rates suppress economic activities, while fighting against inflation, it will also increase the risk of economic recession.
From the perspective of the current economic situation and the Federal Reserve's forecast, to achieve "soft landing", at most, it only has the condition of "softness";Quite bumpy.First, the current inflation rate is still far from the target of 2%; second, the economic performance is tough, the consumption expenditure is hot, making the service price of the price high, and the inflation is difficult to decrease quickly.Furthermore, international oil prices have continued to rise from July this year. Recently, it was closer to $ 95 per barrel (about S $ 129) for a time, which was nearly 30%of the low lows in June.; The prices of domestic auto and diesel have also risen sharply, which not only drives the overall inflation rate from the low point, but also will inevitably push the transportation cost, making the core inflation rate also increase the high.In addition, preliminary bottoming signals have appeared in mainland China economy; once the mainland prosperity rebounds, the world will have a less inflation force worldwide.Because of this, the Federal Reserve has a reason to be cautious about inflation.
In fact, not only "landing" is not easy, but even the word "soft" is risky.First of all, the increase in oil prices to increase the overall inflation on the one hand, but also suppress the non -necessary expenditure of the people; it will help reduce core inflation, but it will also suppress economic growth, and the overall impact is difficult to predict.Secondly, the United States Union Workers' Union (UAW) recently launched a strike, and the number of people will continue to increase, which may make up to one -third of the car output. Furthermore, the current federal government's current expenditure authorization will be cut off on September 30.If an agreement cannot be reached, the federal government may be forced to close.If these incidents are interference in the economy, they will inevitably suppress consumer expenditure and affect the Fed's efforts to fight against inflation.In addition, from October, people with millions of underset -owned loans will be repaid, and the Federal Reserve raises a sharp interest rate., So that the economy has "softened" and suddenly worsen into "slide".
The Fed's insistence on rising is absolutely reasonable; but the confidence in reaching "soft landing" may be too early; even if it is achieved briefly, it may be difficult to maintain.
