The Federal Reserve raises interest rates by 75 basis points for the third time in a row.

After the inflation rate rose to the highest level, exceeding expectations in August,
all expectations were indicating a new interest rate hike by the US Federal Reserve.
During the last three months

topic’s

Work data

Jerome Powell Interest rates will not be cut until inflation reaches 2%

Violent fluctuations in US markets after the Federal Reserve’s decision

Work data

In a report issued by the Ministry of Labor from two weeks,
it was found that the consumer price index recorded
an increase of 0.1% from July compared to 2021,
and also the index rose by 8.3%, and by comparing the results,
we will find that it rose by 0.6% from July and for the year past about 6.3%.

Jerome Powell’s remarks at the July meeting

At the meeting of the Federal Reserve Chairman in July of this year,
after raising interest rates for the second time by about 75 basis points,
he stressed that the Central Bank will strive to try to control
the high prices significantly and try to bring inflation to 2%,
and stressed that it is a The trend needs positive indicators in the economy,
which will appear more clearly in the coming period, but the high data on inflation,
employment and wages support this plan to continue the monetary tightening

Is the fourth increase approaching?

Despite the danger of facing inflation through more interest rate hikes,
which will lead to a state of stagnation,
this will not prevent the Fed from raising a possible increase in the next meeting,
and we may see an increase at the end of this year
to 4.4% and 4.6 in the next year 2023 According to expectations,
we may see an increase in November by about 75 basis points,
to be the fourth time in a row
The US economy recorded a contraction of 0.9% during the second quarter of this year 2022
on an annual basis, and this is completely contrary to expectations that refer to 0.4%

Another drop in GDP

The US economy witnessed a contraction of the gross domestic product by about 1.6 percent
during the first three months of this year, compared to the same period last year.
This comes after expectations issued by the International Monetary Fund
last July indicated growth in the gross domestic product Of 2.3% by the end of this year

artical name The Federal Reserve raises interest rates by 75 basis points

Jerome Powell Interest rates will not be cut until inflation reaches 2%

Jerome Powell said at the press conference held in Washington on Wednesday,
September 21, that there is no way to stop raising
interest rates until it reaches the desired goal,
which is to reduce inflation until it reaches 2%,
and there is no specific date for that.

Which came after raising interest rates by 75% for the third time in a row,
while Fed officials expect that the interest may rise to 4.4 by the end of the year,
and in 2023 it may reach 4.9%,
according to the quarterly reports and expectations
announced by the Fed during the meeting,
which can be put to The table in November,
a week before the midterm elections,
was the fourth straight rise of 75 basis points.

Expectations have shown that the tightening of things towards
the Fed’s decision-making could cause an economic recession in the United States,
despite the Fed officials’ view, which aims to calm inflation in any situation,
even if it comes at the expense of weak growth for a period.

Does this opinion affect economic growth?

Here is a summary of the proceedings.
The Fed has lowered estimates of economic growth for the United States,
believing that by 2023 the rate may reach 1.2%, and in 2024 it may reach 1.7%,
which makes decisions more stringent on the monetary policy side.

The expectations stated by the Fed also showed
that the unemployment rate may rise to approximately 4.4% by the end of next year
and the same until the end of 2024,
with a rise of between 3.9% and 4.1%, respectively,
in the June forecast.

Powell indicated during the meeting that
curbing inflation is the priority at present,
expecting that some commodity prices, which began to decline,
will decrease with the increase in inflation rates,
stressing that the smooth decline of the American
economy is marred by a state of complete uncertainty.

artical name The Federal Reserve raises interest rates by 75 basis points

Violent fluctuations in US markets after the Federal Reserve’s decision

Wednesday, September 21, 2022, the American markets, stocks,
and commodities are shaking, recording a significant and noticeable decline,
as the Nasdaq 100 index fell by 1.8%,
the Dow Jones Industrial Average recorded a decline of 1.7%,
and the S&P 500 index also decreased by 1.7 percentage points,
and the MSCI global index recorded a decline of 1.5%

This came after the Federal Reserve’s meeting and
the decision to increase interest rates by
75 percent for the third time in a row recently.

It was a horror movie swirling the markets today after
Powell’s remarks in Washington during Wednesday’s press conference
where he stated that officials are very intent on bringing
inflation down to the Federal Reserve’s 2% target and also stated that
we will continue to do so until the desired goals are achieved.

Where expectations indicated that
the interest rate may decrease to 3.9% in 2024,
and by 2025 it may also decrease by about 2.9%.

As for Fed officials,
the expectations came as follows by the end of this year,
the interest rate may rise by about 4.4%,
and by 2023 we may record 4.9%,
according to the quarterly reports and
expectations announced by the Fed today,
which indicates that after the fourth consecutive rise estimated
at 75 basis points may be on the table
for the next meeting in November,
coinciding with the midterm elections or a week before it.

The updated forecast released by the Fed today showed the unemployment
rate rising to 4.4% by the end of next year and
the same at the end of 2024 – up from 3.9%

and 4.1% respectively in the June forecast.

The Fed also lowered its estimates of US economic growth
in 2023 to 1.2% and 1.7% in 2024,
reflecting a greater impact of monetary tightening.

Comments on the decision were as follows

Greg Pack, CEO of AXS Investments,
said: “Wednesday’s Fed action,
combined with ongoing roller-coaster-like market volatility,
underscores investor unease amid rampant and
driven economic and market uncertainty,
high inflation, and corporate earnings warnings.
geopolitical concerns and other factors strongly affect Wall Street

Evercore’s Krishna Guha also stated:
“Fed releases at the September meeting are unequivocally hawkish
and the macro outlook indicates an increased
risk of a more difficult downside.”
The Fed’s policy was reflected in the dollar’s value,
which continued to rise significantly against the major currencies.

Here is a summary of some of the moves.

The British pound fell 0.9% to $1.1281
The euro also fell by 1.2% against the dollar,
as it recorded 0.9847
The Bloomberg Spot Dollar Index rose 0.7%.

As for the bonds.

The yield on British 10-year bonds rose by two basis points to 3.31%.
and The yield on 10-year Treasuries also fell by six basis points to 3.51%.
The yield on German 10-year bonds also fell by three basis points to 1.89%.

As for the goods.

West Texas Intermediate crude fell 0.7% to $83.34 a barrel
In parallel, gold futures rose 0.6% to $1,681.40 an ounce.

Which made the dollar witness the peak of its brilliance in the markets,
as well as bonds, as we explained,
as we have not seen these jumps since 2008.

This came according to the inflation crisis that Oria suffers from,
not to mention the energy crisis as well.

artical name The Federal Reserve raises interest rates by 75 basis points

The Federal Reserve raises interest rates by 75 basis points

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