Seventy-five again - Newspaper Kommersant No. 175 (7376) of 09/22/2022

Seventy-five again - Newspaper Kommersant No. 175 (7376) of 09/22/2022



Following the results of the September meeting, the US Federal Reserve System (FRS) raised the key rate again, bringing it to the range of 3-3.25% per annum. As in the results of the two previous meetings, the increment was 0.75 percentage points. At the same time, the forecast for the rate has been sharply raised - it is assumed that by the end of the year it may rise to 4.25-4.5%, which is one percentage point higher than expected in June. The Fed also downgraded its growth estimate for the US economy this year and next. According to the head of the regulator, Jerome Powell, the US labor market remains "extremely tight" - this will allow the Fed to continue to raise rates.

The US Federal Open Market Committee on Wednesday raised its key rate by another 0.75 percentage points to 3-3.25%, indicating that "a further rate increase is justified." The same increase was observed following the results of the previous two meetings. In general, the tightening of the Fed's policy on rates began in March, in May it was announced the beginning of a reduction in the volume of assets on the regulator's balance sheet.

A statement following the meeting noted that current figures point to "modest growth" in consumption and production. At the same time, inflation is at an elevated level due to an imbalance in supply and demand, high energy prices and other factors. The regulator again noted that "Russia's invasion of Ukraine and related events create additional pressure on inflation and on global economic activity."

The scatter chart with the forecasts of the committee members has been sharply changed - now it assumes an increase in the rate this year to 4.25-4.5%, the next - up to 4.5-4.75% (in June it was up to 3.25-3.5%). .5% and 3.5–3.75%, respectively).

Jerome Powell, commenting on the outcome of the meeting, said that the regulator "is determined to reduce inflation", noted the deterioration in the real estate market and the fact that weak economic growth abroad is holding back US exports.

At the end of August, the head of the Fed already stated that premature easing of policy could be dangerous, so a temporary decrease in inflation is not a sufficient signal for the regulator, but now he pointed out that the labor market remains "extremely tight."

US inflation began to slow down back in July, when the rate fell from a record 9.1% to 8.5%, in August the annual price growth fell to 8.3%. Core inflation (excluding food and food) was 6.3% against 5.9% in July. The consumer price index, which the Fed focuses on, fell by 0.1% in July after rising by 1% in June, in annual terms, the indicator fell from 6.8% to 6.3% (excluding energy and food - from 4 8% to 4.6%).

The macro-forecast for the US economy has also been substantially revised: the expected GDP growth this year has been reduced from 1.7% to 0.2%, next year - from 1.7% to 1.2%.

According to the results of the second quarter, the indicator decreased by 0.6% on an annualized basis (that is, if the indicator changed at the same pace throughout the year) after a decline of 1.6% in the first. Inflation forecast, on the contrary, is slightly raised - for this year from 5.2% to 5.4%, for the next one - from 2.6% to 2.8%. Unemployment is expected to rise to 3.8% this year and 4.4% next year (previously the Fed forecast 3.7% and 3.9%). In August, the indicator increased from 3.5% to 3.7%, 315 thousand jobs were created during the month against 528 thousand a month earlier.

Experts expect the Fed to further raise rates at its meeting in November. “The only question is whether this increase will be 0.5 p.p. or 0.75 p.p., the probability of the second scenario is higher, but the Fed’s decision will depend on inflation statistics for September,” the stock market expert believes. market "BCS World of Investments" Denis Buivolov. Natalya Milchakova, a leading analyst at Freedom Finance Global, also expects further rate hikes, as, according to her, there are “only hawks left” in the Federal Open Market Committee - by the end of the year, the rate will exceed 4%, that is, it will reach the level of the beginning of the zero years.

Tatyana Edovina



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