Keep an eye on US interest rate hikes

the wind changes direction

27 July 2022 6:41 a.m.





Copy link


After midnight tonight, Federal Reserve Chairman Jerome Powell will announce the results of the meeting.

The FOMC will decide to raise interest rates another 0.75%, or 1%, after US inflation soared to 9.1% in June

despite the Fed raising interest rates three times, but failed to keep inflation down.

In addition, inflation has not yet been able to spur interest rates.

In March, the Fed raised interest rates softly by 0.25%, inflation still rising.

May Fed Raises Interest Rates Harder to 0.50%, But Inflation Still Rises

The Fed raised interest rates further to 0.75% in June, but June inflation continued to rise as high as 9.1%, hitting a new 40-year high.

It is not yet known whether US inflation will reach a new peak in July or not.

Therefore, tonight must be watched.

Fed rate hike that will affect the world

The Fed will only raise interest rates by 0.75% last time, as the market expected.

Or will use strong drugs up to 1% from a level of 1.50-1.75% to a level of 2.50-2.75% to know and survive.

Wherever the US economy has entered a recession

First quarter US GDP fell 1.6% Q2 Federal Reserve

The Atlanta branch forecasts a further 1.6 percent decline in US GDP, causing the US GDP to contract for the second straight quarter.

Even tech giants like Apple, Meta, Google, Microsoft, Amazon, Tesla have to layoffs, demote and not recruit more people.

US Treasury Secretary Janet Yelen

former Fed chair

In an interview on NBC television, excused that.

There are currently no signs of the US economy entering a broad recession.

Ms Yelen said we were likely to see a slowdown in employment numbers.

but i think

That's not a recession.

The term recession refers to a broader economic slowdown.

We haven't seen such a signal yet.

Even though the economy has contracted for 2 consecutive quarters, I don't think.

The US National Bureau of Economic Research (NBER) decides that our economy has entered a recession, but called it “the economy in transition” from being too overheated.

is expanding at a slower rate

which is the right condition

It can be called a slowdown or a recession, but in conclusion, the US economy has been negative 1.6% for 2 quarters. If the third quarter is still negative, it is called

"continuous slowdown" instead of "regression"

Raising interest rates fast and hard

to push inflation down faster

of the US Federal Reserve

As a result, the US economy has already slowed down because it has reduced people's purchasing power in all dimensions.

higher interest rates

increase the cost of borrowing

As a result, production costs and service fees are more expensive.

The price of the product and the service fee has increased accordingly.

decrease sales

because the purchasing power of the people has decreased

leading to layoffs and not accepting more people

to reduce costs

Cause unemployment, although Mrs. Janet Yelen, US Treasury Secretary.

Talk about a strong US labor market with 400,000 jobs per month, but probably not from now on.

Today, the great United States

not only have to face

Inflation is the highest in 40 years and has to speed up interest rates.

Hurting more than 330 million Americans, but the United States is still faced with strong rivals China and Russia, which the United States has set up tariffs on Chinese goods.

and economic and financial sanctions against Russia.

to cause the collapse of the Chinese and Russian economies.

It eventually turned into harming myself and the EU allies.

until they burst into flames

The behavior of US leaders Trump and Biden reminded me of the Buddha's teaching on "mercy sustains the world." War is not the road to lasting peace.

"The wind changes direction"