FED Hikes Rates with another 75 bp as expected

FED Hikes Rates with another 75 bp as expected

FED Hikes Rates with another 75 bp as expected

The vote was unanimous because FOMC is “strongly committed to returning inflation to its 2 percent objective”. Spending and Productions have softened but job gains was robust recent months. Balance sheet reduction ongoing as planned.


Summary from Powel

  • Inflation is much too high
  • There is still additional upward pressure on inflation
  • We're highly attentive to inflation risks
  • We are looking for compelling evidence of inflation coming down
  • Although prices for some commodities have turned down, earlier surge has boosted prices and inflation pressure
  • Inflation has surprised to the upside in the past year so we will need to be nimble
  • Will watch PCE and CPI but think PCE is the best measure of inflation
  • We need to see inflation coming down
  • Labor market is extremely tight
  • Wage growth is elevated
  • Business fixed investment looks to have declined in Q2
  • We want to see demand running below potential for a sustained period
  • The pace of hikes will continue to depend on incoming data and evolving outlook

You can read full statement here https://www.federalreserve.gov/newsevents/pressreleases/monetary20220727a1.htm

 

Some Good news instead of inflation is Atlanta Fed GDPNow final Q2 reading -1.2% vs -1.6% prior

IMF Cuts Growth forecast from 2022 & 2023 again.

Germany August Consumers Sentiment dropped to lowest levels -27.7 vs -27.4

Germany Rethink Nuclear Power Exit https://www.ft.com/content/cc422ece-92b3-41fa-a05c-900270bfe824

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