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Fed officials make hawkish statements, Jackson Hole meeting draws follow.
The global Central Bank annual meeting is approaching, and Fed officials are frequently speaking out.
Next Friday, global investors will focus on the Jackson Hole Global Central Bank Conference held in Wyoming, USA. Fed Chairman Powell will give a speech discussing the economic outlook, which could provide important clues for the future direction of U.S. interest rates.
On the eve of Powell's speech, several Fed officials made a series of hawkish remarks, seemingly setting the tone for the important address to come. Observers expect that Powell may reiterate the Fed's determination to curb inflation and control rising price expectations.
Last Friday, Richmond Fed President Barkin stated that even in the face of recession risks, the Fed must remain committed to fighting inflation. A day earlier, three Fed officials also expressed similar hawkish views.
St. Louis Fed President James Bullard favors a 75 basis point rate hike in September. He believes that the policy rate should be raised quickly to a level that can exert significant pressure on inflation, and questions the necessity of delaying the rate increase. Bullard stated that the current economic situation is relatively clear, and since the inflation rate remains too high, it is reasonable to continue raising rates.
Kansas City Fed President George shares a similar view. She believes that although the July inflation data is encouraging, it is still too early to declare that inflation has been controlled.
The dovish San Francisco Fed President Mary Daly stated that the Fed should slightly raise interest rates to above 3% before the end of the year. She emphasized that the specific rate hike in September will depend on future economic data, with both 50 and 75 basis points being possible. Daly also pointed out that the market should not expect the Fed to quickly shift to rate cuts next year.
Ann-Katrin Petersen, a senior strategist at BlackRock Investment Institute, believes that in order to achieve the 2% inflation target, the Fed may have to suppress economic growth. However, to promote economic development, the Fed may ultimately accept the reality of coexisting with moderate inflation. This policy shift may not occur until 2023, later than the current market expectations.
Under the influence of this series of hawkish remarks, the cryptocurrency market experienced a significant decline last Friday, reflecting investors' concerns about tightening monetary policy.