U.S. Federal Reserve (Fed) Chairman Jerome Powell gave a speech at the American Business Economic Association on Monday, saying that if the economic development is in line with expectations in the future, monetary policy will shift to a more neutral stance.
The most noteworthy thing is that during the question and answer period after the meeting, Ball said:
If the U.S. economy performs as expected, it means there will be more rate cuts this year, totaling another 50 basis points.
In other words, if there are no surprises, the Fed will most likely cut interest rates by one point each in the remaining two meetings (November and December), pouring cold water on investors who expect a larger interest rate cut.
On the labor front, although the U.S. employment situation has cooled significantly in the past year, Ball believes that the current situation is still stable and believes that the 2% inflation target can be achieved without seeing the job market cool further. (The U.S. Department of Labor will announce the number of new non-farm payroll jobs in September this Friday (October 4))
FedWatch: 63.3% chance of a 1% rate cut in November
According to the CME Group's FedWatch tool , the probability that the Federal Reserve will cut interest rates by 1 percentage point at the November meeting has now increased to 63.3%, while the probability of a 2-point rate cut has dropped to 36.7%.
U.S. dollar index rises, U.S. stocks turn negative
After Powell extinguished expectations of a sharp interest rate cut, the U.S. dollar index once rose to 100.86, and is now slightly down to 100.77.
In terms of U.S. stocks, although there was a brief drop at the opening last night, it subsequently turned from black to red. The Dow Jones and S&P indexes continued to hit new closing highs, and the other three major indexes except for the Federal Reserve all closed slightly higher.
- The Dow Jones Industrial Average edged up 17.15 points, or 0.04%, to 42,330.15 points
- The S&P 500 index rose 24.31 points, or 0.4%, to 5,762.48 points
- The Nasdaq Composite Index rose 69.58 points, or 0.4%, to 18,189.17 points
- The Philadelphia Semiconductor Index fell 44.17 points, or 0.85%, to close at 5,173.06 points
