The "boots" of the Federal Reserve’s interest rate hike in September have landed, but the bitmap suggests that the "super interest rate hike" is still not over.
On September 21, local time, the Federal Reserve announced the interest rate resolution, announcing a 75 basis point interest rate hike. The latest bitmap shows that most Fed officials expect to raise interest rates by 125 basis points during the year. The market expects that the next Fed meeting on interest rates (November) may continue to raise interest rates by 75 basis points.
On that day, US stocks took a roller coaster ride. The three major US stock indexes dived collectively after the announcement of the Federal Reserve’s interest rate decision, and then rose rapidly. At the end of the session, Federal Reserve Chairman Powell dived again from the high platform and finally plunged collectively. The dollar index rose significantly, standing at 111. According to Xinhua News Agency and CCTV news reports, James, Attorney General of New York State, sued former President Trump and others and Trump Group for financial fraud to obtain economic benefits on the 21st. The US House of Representatives passed the presidential election reform bill by 229 votes to 203 votes. Russia will continue to participate in the International Space Station project until 2028.
The US "roller coaster" dollar index stood at 111.
On September 21, local time, the three major US stock indexes collectively took a roller coaster ride.
According to Wind data, during the morning trading hours, the three major indexes of US stocks showed a stable trend, with a cliff diving at 14:00 in the afternoon, and then quickly rose, and then dived again at the end of the session. As of the close of the day, the Dow Jones Industrial Average, Nasdaq and S&P 500 index fell by 1.70%, 1.79% and 1.71% respectively, all hitting new lows in two and a half months.
Source: Wind
While the US stock market is riding a roller coaster, the US dollar index is rising. According to Wind data, as of the end of the day in new york, the US dollar index rose by 1.07% to 111.3731, a record high since 2002.
Source: Wind
The sharp fluctuation of US stocks made the market risk appetite converge, and crude oil turned from rising to falling. According to Wind data, as of 6:00 on September 22nd, Beijing time, NYMEX crude oil and ICE oil fell by 1.06% and 0.37% respectively.
Boosted by risk aversion, gold kept rising. According to Wind data, as of the close of the day, the main contract of COMEX gold futures rose by 0.66%.
Source: Wind
The Federal Reserve announced a rate hike of 75 basis points.
Analysts said that the sharp intraday volatility of US stocks was related to the release of the Federal Reserve’s monetary policy, and the time points of the two sharp dives in the late session of US stocks respectively corresponded to the announcement of the interest rate resolution by the Federal Reserve and Powell’s press conference.
On September 21, local time, the Federal Reserve announced its interest rate resolution in September, announcing a 75 basis point interest rate hike and raising the target range of the federal funds interest rate to between 3.00% and 3.25%. The upper limit of the federal funds interest rate range (IOER) was also raised by 75 basis points, from 2.4% to 3.15%.
This is the fifth time that the Fed has raised interest rates this year, and it is also the third time in a row that it has raised interest rates by 75 basis points, the largest intensive rate hike since 1981.
The Federal Reserve’s interest rate resolution did not give too much description on the table shrinkage, but indicated that it would continue to reduce its holdings of government bonds, institutional bonds and institutional mortgage-backed securities (MBS) according to the table shrinkage route announced in May.
It is reported that in May this year, the Federal Reserve announced the route of reducing its balance sheet, and reduced its bond positions from June 1. Initially, it reduced at most US$ 30 billion in US Treasury bonds and US$ 17.5 billion in institutional MBS every month. After three months, the maximum monthly reduction was doubled.
Powell said at a news conference that in order to bring the inflation rate back to 2% and keep it stable, the Fed will strive to raise interest rates and keep them high until the inflation rate drops. He stressed that according to historical records, the policy cannot be relaxed prematurely.
Fed lowers US economic growth forecast
The Federal Reserve sharply lowered its forecast for US economic growth and raised its inflation forecast.
According to the economic outlook released by the Federal Reserve on the same day, it is estimated that GDP will increase by 0.2% in 2022, far lower than the expected growth rate of 1.7% in June; The expected GDP growth rate in 2023 and 2024 will be lowered from 1.7% and 1.9% to 1.2% and 1.7% respectively. It is estimated that the unemployment rate will rise from 3.7% to 3.8% in 2022, from 3.9% to 4.4% in 2023 and from 4.1% to 4.4% in 2024.
In terms of inflation in the United States, the Federal Reserve expects the PCE inflation rate to rise from 5.2% to 5.4% in 2022, from 2.6% to 2.8% in 2023 and from 2.2% to 2.3% in 2024. It is estimated that the inflation rate of core PCE will rise from 4.3% to 4.5% in 2022, from 2.7% to 3.1% in 2023, and will remain unchanged at 2.3% in 2024.
Regarding the US economy, Powell said that it is impossible to predict whether the interest rate hike process will lead to economic recession and how serious the recession will be. "This will depend on the speed at which wages and inflationary pressures fall, whether expectations remain stable and whether we can obtain more labor supply."
He added that if the policy is more restricted to achieve the 2% inflation target, the possibility of a "soft landing" will be reduced, however, high inflation will bring greater long-term pain.
The bitmap "eagle" is full of gas.
The Fed raised interest rates by 75 basis points in September, which was in line with market expectations. However, the "eagle" gas revealed by the bitmap exceeded market expectations.
The latest bitmap released by the Federal Reserve on September 21st local time shows that most Fed officials expect that by the end of 2022, the Fed will raise interest rates by a total of 125 basis points. This makes it possible to continue to raise interest rates by 75 basis points at the next Fed meeting on interest rates (November), and the market generally expected that the remaining two meetings on interest rates during the year would slow down the rate hike.
The bitmap also shows that Fed officials have raised their interest rate expectations for the next three years across the board: the federal funds rate is expected to be 4.4% at the end of 2022, up 100 basis points from the 3.4% expected in June; The federal funds rate at the end of 2023 was 4.6%, up 80 basis points from the 3.8% predicted in June; The federal funds rate at the end of 2024 was 3.9%, 50 basis points higher than the 3.4% expected in June; The expected federal funds rate at the end of 2025 is 2.9%.
Fed officials predicted that the highest interest rate in three years was 4.6%. Before the Federal Reserve announced the interest rate hike, most Wall Street institutions expected the peak interest rate of the federal funds to be 4% to 4.25%.
The Attorney General of New York sued Trump for financial fraud.
On the 21st, the Attorney General of New York, James, sued former President Trump and others and Trump Group for financial fraud in order to obtain economic benefits. According to this civil lawsuit, Trump falsely exaggerated his net assets with the help of his adult children and Trump Group executives to induce banks to provide loans with more favorable conditions to the group, to induce insurance companies to provide higher insurance coverage but charge lower premiums, and to obtain tax incentives.
The New York State Attorney General’s Office seeks to permanently prohibit Trump and his adult children from serving as executives or supervisors in any company or commercial entity in New York State, prohibit Trump and Trump Group from participating in any real estate acquisition in New York State within five years, and require relevant parties to return about $250 million obtained through fraud.
Trump has not yet responded to this lawsuit. He has repeatedly criticized Democrat James for launching a "political attack" on him, saying that the investigation was "politically driven".
In addition, the U.S. Department of Justice is investigating the situation that Trump took some confidential documents to his private residence when he left the White House early last year. Trump denied wrongdoing.
Us house of representatives passes presidential election reform bill
On September 21, local time, the US House of Representatives passed the presidential election reform bill by 229 votes to 203 votes, which was aimed at responding to some legal problems exposed when supporters of then President Trump tried to prevent Biden’s victory in the election on January 6, 2021.
The presidential election reform bill reaffirms that the role of the vice president in proving the election is ceremonial, and greatly increases the number of members in each house who oppose voter certification, from only one member to one-third of the members in the house. In addition, the bill requires the court to intervene if state or local officials want to postpone voting in the presidential election or refuse to prove the voting results.
A fire at an oil refinery in the United States killed two people.
The US branch of BP said on the 21st that a fire broke out in an oil refinery in Ohio, USA, killing two employees.
The company said in a statement on the same day that the fire was put out on the evening of the 20th and the refinery was closed. The video on social media showed that on the evening of the 20th, the refinery was filled with smoke and the fire was fierce. At present, the cause of the fire and the damage to the refinery facilities are not clear.
According to the website of BP’s American branch, the refinery has a history of hundreds of years, and the maximum daily processing capacity of crude oil can reach 160,000 barrels.
Russia will continue to participate in the International Space Station project until 2028.
Borisov, president of the Russian National Aerospace Corporation, said at the Baikonur launch site on the 21st local time that Russia is likely to continue to participate in the International Space Station project until 2028.
Borisov had previously reported to President Putin that after 2024, Russia would begin to withdraw from the International Space Station project and build its own orbiting space station. The United States and other European countries plan to use the International Space Station until 2030. They didn’t comment on Russia’s plan to quit the International Space Station in 2024, because they didn’t receive a formal notice from Russia.
After that, borisov explained that he meant that Russia would not leave the International Space Station earlier than 2024, but the exact withdrawal time would be determined in the future. Sergei Krikalyov, head of manned project of Russian National Aerospace Corporation, said that the time for Russia to withdraw from the International Space Station project will depend on the technical status of the space station, which may be 2025, 2028 or 2030.
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