Federal Reserve Chairman Jerome Powell is scheduled to attend the Jackson Hole Annual Meeting of Global Central Banks at 10 a.m. Eastern Time on the 23rd (10 p.m. Taipei time on the 23rd) and deliver a keynote speech on the economic outlook. At the critical moment before the Fed cuts interest rates, the outside world is paying close attention to the monetary policy message he releases.
Fed officials support gradual rate cuts
On the eve of the annual meeting, San Francisco Fed President Mary Daly, who has voting rights on the Federal Open Market Committee (FOMC), was interviewed by the Financial Times and expressed her support for a slow rate cut, saying that recent economic data gave her more confidence that inflation has Gaining control, now is really the time to think about adjusting interest rates.
Mary Daly downplayed the need for a drastic response to signs of labor market weakness, saying the U.S. economy has few signs of entering a deep recession and the economy is not in a "critical state." A gradual approach does not mean that interest rate cuts will fall behind. prudent performance,
Mary Daly mentioned that although the labor market is slowing, it is not "weak". As inflation falls and the labor market becomes more balanced, the Fed must "adjust policy rates to adapt to the current economic situation and future economic expectations."
According to CME Group's FedWatch Tool , there is a 24.5% chance that the Federal Reserve will cut interest rates by 2 points to 4.75% to 5% in September, and a 75.5% chance of cutting interest rates by 1 point to 5% to 5.25%.
The U.S. bond market was relatively calm on the eve of Ball's remarks, with a Reuters survey of bond strategists showing U.S. bond yields set to rise in the coming months as financial markets once again overestimate the extent of the Fed's rate cuts this year. After rising slightly in January, the 10-year U.S. Treasury yield will reach 4% within one month and will remain around this level until January next year.
Evercore ISI: Ball will be open to 2-yard rate cut
Analysts at Evercore ISI estimate that Ball will outline a flexible approach to interest rate cuts on Friday and emphasize that the Fed is prepared to cut interest rates significantly if needed:
Ball's view would be reassuring and consistent with a soft baseline of 25 basis points of rate cuts, but would be open to a 50 basis point cut with a modest threshold.
Evercore ISI expects that Ball will confirm the Fed's confidence that inflation will return to the 2% target, suggesting that interest rates will be cut as soon as September. However, Ball is unlikely to commit to the specific scale of interest rate cuts at this stage. Ball is expected to indicate, The Fed's move will depend on upcoming labor force data.
Evercore ISI mentioned that Ball’s speech will focus on explaining the progress the Fed has made in curbing inflation and rebalancing the labor market, and preparing for interest rate cuts. Ball will reiterate that although the Fed may intend to cut interest rates for 25 consecutive months in the near future, basis points, but more aggressive action will be taken to allay market concerns if labor data indicates the need.
Progress in Israel-Kazakhstan negotiations
In addition, regarding the Israel-Kazakhstan conflict, it was previously reported that the ceasefire negotiations between Israel and Kazakhstan have broken down . US Secretary of State Blinken, who went to Israel to mediate, said today that Israeli Prime Minister Netanyahu assured him that he would support the US’s recent proposal to bridge the ceasefire differences in the Gaza corridor. transition proposal and urged Hamas to agree to accept the proposal, which he said was the last chance for a ceasefire.
Blinken held a three-hour meeting with Netanyahu today (20th). He said that Netanyahu promised that Israel would send a delegation to participate in the negotiations mediated by Egypt and Qatar and resumed this week. Hu confirmed to him that Israel accepted the transition proposal and that it was now Hamas's responsibility to do the same.
