On the day when the Federal Reserve announced a rate hike, its "bitmap" was obviously different from market expectations. The "bitmap" of Fed officials' expectations for the future interest rate path shows that the two officials do not expect to raise interest rates in 20 15 years. In addition, the Fed predicts that by the end of 2065,438+06, the interest rate may reach 65,438+0.375%, which means that the Fed may raise interest rates four times next year. Officials also expect that the median interest rate will reach 2.375% at the end of 20 17 and 3.25% at the end of 20 18, which are lower than the predicted values of 2.625% and 3.375% in September of 20 15 respectively.
As a tool to observe the market's forecast of the Fed's interest rate hike probability, CME's Fedwatch tool based on the 30-day US federal funds rate futures price shows that the market expects the Fed to raise interest rates only twice on 20 15 12 18, while the federal funds rate is 0.77 at the end of 20 16.
2065438+2006 65438+1 October1day, 30-day US federal funds rate futures forecast results show that the probability of the Federal Reserve raising the federal funds rate to 0.5% at the interest rate meeting in 20061October 27+2006 is as high as 88./kloc. March 2065438+06 16 The probability that the Federal Reserve will raise the federal funds rate to 0.75% also reaches 50.3%; 20 16 In April, the probability that the Fed will raise the federal funds rate to 1% is only12.1%; By 20 16 and 12, the probability of the Fed raising the federal funds rate to 1% rises to 3 1.6%, and the probability of raising the federal funds rate to 1.25% is 25.7%. It can be seen that in 20 16, the number of times the Fed may raise interest rates is still only twice, which is not much different from the predicted results on the day of raising interest rates in 20 15 and 12.
Judging from the factors considered by the Fed's previous interest rate hikes, it is nothing more than the job market, inflation expectations and economic growth expectations. The factor of this increase is the stability of the financial market. As for the future prospects, the Fed believes that since the beginning of 20 15, the problem of idleness in the job market has "obviously subsided", maintaining the long-term unemployment rate expectation unchanged at 4.9% and maintaining reasonable confidence that the inflation rate will rise to 2%. At the same time, it is believed that the economy is expanding moderately and the housing market has improved, so the prospect of the Fed raising interest rates is optimistic.
Under the framework of the Federal Reserve's monetary policy, whether inflation can reach the standard depends not on the relatively lagging inflation data, but on the prospect of inflation recovery, and the prospect of inflation recovery has always depended on the rise of wages brought about by the improvement of the labor market (the decline of unemployment rate), which is the so-called Phillips curve. Empirical research shows that the Phillips curve is indeed established in the real economy of the United States in the past 30 years, and the rebound of inflation is indeed lagging behind the decline of unemployment rate. Therefore, although the core PCE of 20 15 and 12 has not increased significantly, as long as the index remains stable, it is still very likely that the Fed will raise interest rates again on 20 16 and 16.
From the perspective of economic growth prospects, looking at the major economies and their sub-sectors, only the residential sector in the United States has truly achieved deleveraging. Driven by the improvement of the job market, the increase of consumers' income, the relaxation of consumer credit loan conditions and the decline of energy prices, there is the possibility of credit expansion in the US housing sector, so the Federal Reserve may raise interest rates beyond expectations in 20 16.
To sum up, the weak credit expansion in the U.S. housing sector has become the biggest obstacle to the U.S. GDP growth, and the pace of the Fed's interest rate hike will depend on the economic situation, but overall, this process is slower and gentler than the previous ones, and the possibility of lowering interest rates again after the U.S. economy weakens in 20 16 cannot be ruled out.