What will investors learn from the minutes of the Fed’s meeting?


What will investors learn from the minutes of the Fed’s meeting?

Fed officials held a meeting last month to discuss monetary policy, and investors left after the minutes of the meeting were announced on Wednesday.

The U.S. Central Bank surprised market participants when it signaled a potential policy change in mid-June Higher inflationary pressure And strong growth.Its interest rate forecast opened the door for two interest rate hikes in 2023, which was a huge difference from the last forecast in March, when the so-called “dot chart” indicator predicted by interest rate setters Suggest It will maintain its ultra-loose policy until at least 2024.

U.S. stocks endure Immediately after the June meeting, this was the worst week in nearly four months.Investors are also Reassess They firmly believe that when long-term Treasury bonds sell at a faster rate than short-term Treasury bonds, they will make a profit.

Senior Federal Reserve officials-including Chairman Jay Powell and John WilliamsThe president of the New York branch-trying to alleviate people’s concerns that interest rates are being considered early, but emphasized the huge uncertainty of economic recovery and the central bank’s broader commitment to achieving full employment. These comments will help stabilize the market in the next few weeks, but investors will pay close attention to Wednesday’s meeting minutes for more details.

Morgan Stanley strategist Vishwanath Tirupattur said: “The legal issues regarding the direction of monetary policy and the Fed’s response function are now the primary and central issue for market participants.” “Considering the Fed’s ultra-loose policy since the outbreak of the Covid-19 crisis In describing the role of market trends, increased policy uncertainty will have a far-reaching impact.” Colby Smith

Will the EU raise its growth forecast?

European economic prospects will attract attention in Brussels on Wednesday, when the European Commission will raise its growth forecast for the next two years.

The chairman of the committee, Ursula von der Leyen, said last week that the region’s growth prospects are becoming “Getting better and better“And expressed confidence that by the end of next year, all 27 EU countries will “completely recover from the economic crisis.” [Covid-19] crisis”.

Following the relaxation of lockdown measures in many countries in recent months in response to the decline in coronavirus infections and the acceleration of vaccination rates, business activities and consumer confidence have increased. Bounce back.

The EU’s economic confidence indicator-based on a monthly survey of households and companies-soared to a 21-year high in June when it was released last week. The investor survey reports released by Sentix and Zew on Monday and Tuesday are also expected to show strong readings.

In May, the European Commission forecast The Eurozone will grow by 4.3% this year and by 4.4% next year. Compared with the European Central Bank’s own forecasts of 4.6% and 4.7% growth this year and 4.7% in June, these are somewhat conservative.

Delta variants are still likely to cause a surge in coronavirus infections in the summer, and containment measures need to be resumed in the fall.

However, Berenberg’s chief economist Holger Schmiding said that due to the rapid progress of vaccination, it is unlikely that more lockdowns will be implemented. He added: “Unless the virus triggers a major annoying surprise, the assumption that economic performance can continue to decouple from the evolution of the virus based on trends seems to be valid.” Martin Arnold

Will Chinese producer prices continue to rise rapidly?

Inflation data released by China on Friday is expected to show that factory prices in the country will continue to rise, which has soared this year due to rising global commodities.

Bloomberg economists predict that the producer price index will rise 8.7%. May PPI data display An increase of 9%, which is the fastest growth rate since the 2008 financial crisis.

The soaring price of raw materials pushed up the index, which raised concerns about the possibility of spreading to consumer price inflation, which is still at a low level.

The data on Friday is expected to show that the CPI is still at a low level, only 1.3%, the same level as in May.The Chinese government has taken measures to crack down on high commodity prices. Last week, the country’s top economic planning agency prediction Coal prices will fall due to increased production and imports.

Globally, due to US stimulus spending, the consumer price index in May this year increased concerns about inflation. rose 5% is growing at the fastest rate since 2008. After China benefited from strong exports to the rest of the world during the coronavirus, analysts carefully studied China’s role in broader price pressures.

Capital Macros Senior China Economist Julian Evans-Prichard said, “Although there is China, it is not because of China” and prices are still rising.

“Although the U.S. dollar prices of Chinese goods have risen over the past year, these price increases have generally not kept up with the appreciation of the renminbi,” Evans-Pritchard said. “Calculated in RMB, export prices have been dropping exceptionally fast.” Thomas Hale



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