The Federal Reserve (Fed) announced a quarter-point rate hike on screens at the New York Stock Exchange, and a trader was busy discussing the market's reaction with clients.


The Fed announced on Wednesday that it would raise interest rates by 1 yard to 5.25%, a 16-year high

[Compile Lu Yongshan/Comprehensive Report] The US Federal Reserve (Fed) raised interest rates by one yard (0.25 percentage points) after the meeting on Wednesday, in line with market expectations. The work of fighting inflation is not yet over, and it will take some time for inflation to fall, and it is not suitable to cut interest rates at the end of this year; Powell's remarks with hawks in the doves caused the US stocks to close down on Wednesday.

On Thursday, the Hong Kong Financial Supervisory Commission followed the Fed to raise interest rates by one yard, and the European Central Bank also announced a one-yard interest rate hike.

The Federal Open Market Operations Committee (FOMC) unanimously raised interest rates by one yard, which was the tenth consecutive rate hike, bringing the interest rate to 5% to 5%.

25%, the highest level in the past 16 years; since March last year, the Fed has raised interest rates by 5 percentage points, the most aggressive rate increase in more than 40 years.

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The FOMC statement after the meeting deleted the phrase "the committee expects that some additional rate hikes may be appropriate" that appeared in March, suggesting that the Fed may pause interest rate hikes. Impact of rate hikes over the past year".

"This is an important change where we no longer say 'additional rate hikes are expected,'" Powell said.

Economists expect: Suspension of interest rate hikes next month High interest rates will continue until the first quarter of next year

However, the FOMC statement after the meeting also emphasized that inflation remains high and employment growth remains strong.

Although Powell hinted at a possible pause in raising interest rates, he also said that this is not yet a foregone conclusion. Interest rate policy still depends on the economic data to be released later. He also said that inflation is expected to decline slowly. If this forecast is roughly correct, it is not appropriate to cut interest rates by the end of this year.

Bloomberg economists Anna Wong and Paul (Stuart Paul) pointed out that the Fed is expected to pause interest rate hikes in June, when the labor market will show obvious signs of slowing down, and expect the Fed to maintain high interest rates until the first quarter of next year, because the Fed The expansion rate is very slow.

In addition, Powell said that the recent banking crisis has led to a tightening of the credit environment, which has put pressure on economic activities and the job market, but it has also helped to suppress inflation, and the US banking industry remains sound and resilient.

Fed researchers predict a U.S. recession later this year due to turmoil in the banking sector.

Powell agrees that the U.S. will experience a mild recession, but a soft landing is not out of the question.

Westpac bank (PacWest) tumbled 60% in after-hours electronic trading on Wednesday, as the bank said it was considering some strategic options, including splitting, seeking a buyer or raising funds, showing that the market's confidence in the banking industry is still insufficient. It also caused shares of regional banks such as Western Union to plummet.

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