Opportunities of the Fed resolution in November: open the way to the next interest rate
At 3 pm in Beijing on Friday, the federal government will announce November's decision on FOMC interest rates. Since there is currently no press conference, it is expected that there will be no increase in interest rates, and the focus will be on the resolution statement. Goldman Sachs stressed that the Fed will announce that the US stock market will set options for risky assets in October.
According to the Bloomberg survey, all economists believe that the federal government will not raise interest rates in this resolution, and after a three-fold increase in interest rates this year will be higher next december. At the same time, the market expected expectations of raising interest rates at the end of the year. In 2019 and 2020 it is expected to continue to increase interest rates three and a half times; by 2021, the target area of the dot dock will be between 3.25 and 3.50%. In other words, this round of the fixed exchange rate of the Fed will not stop until 2020.
The recently released US economic data show that the Fed has good reasons to continue hawkish operations. In recent non-agricultural days, the unemployment rate fell to 3.7%, while the average hourly wage rose by 3.1% year on year, while in the third quarter, GDP growth was 3.5%.
The chart below shows detailed results of the latest US economic data:
There will be no press conferences in this resolution in this resolution, but there will not be a central bank to modernize economic expectations. Only monetary policy statements are provided. Goldman Sachs believes that attention is worth the two points. Firstly, after the US equity market fell by about 8%, will the Fed respond directly or indirectly, secondly, if economic action is slowed down, the Fed will announce how to fine-tune.
Goldman Sachs is very radical about the possibility of raising interest rates. "We expect the Fed to raise interest rates by 4-5 times by the end of 2019. The risk for a longer-term cycle of hikes is strong, although this risk is still under control."
The US dollar index fluctuated on Wednesday and did not increase or fall until the end. If the resolution tonight brings a more obvious tilt signal, it can bring vitality to a relatively durable foreign exchange market.
(Article source: Huizhong information)