Powell on the same day in Washington to participate in a campaign, said the us Labour market "extraordinarily strong", the fed needs to further rate increases. If the employment situation is still very hot, the federal reserve is likely to have to take more measures.
The U.S. department of labor. 3, according to data released in January 2023, the U.S. unemployment rate fell to 3.4% month-on-month, non-agricultural jobs number is 517000, as the biggest increase since July 2022, more than three times the market expected, almost in January was the strongest since 1946.
Powell said the labor market than expected strong data show that inflation will fall to 2% inflation target may need quite a long time. Fight against inflation, he thought, the process will not be always smooth, will suffer setbacks in the middle. As a result, the fed will have to raise interest rates, further and had to be for a period of time will remain within the range of restrictive monetary policy.
, analysts say the fed hike since 2022, continued the radical was not significant cooling in the labor market, it may cause more heated debate within the fed, which the fed in do enough to curb inflation. If other data continue to show economic growth in the next few weeks more strongly than expected, the federal reserve officials are likely to be on the current economic situation and the fight against inflation uneasy and fear, or path to raise interest rates to adjust.
It is worth noting that the U.S. labor department released the latest jobs report showed extraordinary job growth not only, and the more important is for the fed, it will be months before the report of the employment growth revised higher, suggesting that the momentum of the U.S. economy into the 2023 more strongly than previously expected, completely contrary to the fed's one-year policy efforts.
Powell said, if the data showed that the economy is speeding up by fed officials have not expected, the federal reserve will increase interest rates to a higher level. "The fed will react to the data. If the Labour market report continued strong or rising inflation, the fed is likely to have to do more, rate increase would exceed market expectations ".
Under the federal reserve aggressively raising interest rates, inflation in the United States last year hit 40 years later, in the near future. A series of more moderate prices sparked optimism, think the fed is win the battle against inflation, or pause or even cut interest rates. But the fed's recent cold water on to the market continuously, determined not to early to declare victory. Labor department for the strong jobs report also quickly reversed the investors' expectations. At present, the consensus forecast is for whether the rebound in economic activity and inflation could prompt the federal reserve officials to consider raising interest rates in March 50 basis points, rather than the federal reserve had been hinted at a more traditional way continue to raise interest rates by 25 basis points.
Headquarters is located in Sacramento, California, us inflation insight into Mr Sharif, who think, meyer, an analyst at January U.S. consumer price index (CPI), the cooling rate may be lower than expected, the fed is necessary in March and may promote to raise interest rates. Fight against inflation, he thought, "there are still many obstacles, the market will be (path) for the fed to raise interest rates to pricing".
However, there is also a bond investors and economists expect the more investment, evidence of a slowdown in spending and employment may convince fed on March 21 solstice 22 next monetary policy meeting to raise interest rates after a pause, and raise interest rates again in May. However, any signs of the economy to accelerate could prompt the federal reserve decided to postpone the summer will be a pause.
According to the monetary policy meeting in December 2022, after the economic outlook, most fed officials believe that the federal funds rate will rise to 5.1% in 2023. This means that the fed will be in March and may raise interest rates by 25 basis points at the meeting. At the same time, more than a third of official interest rates are expected to rise to 2023 by more than 5.25%, which would require the fed to raise interest rates again in June meeting. However, there is no official this year is expected to cut interest rates.
February 1, an end to the fed's monetary policy meeting, for the first time in 2023 raised rates by 25 basis points. Since March 2022, the federal reserve has raised interest rates eight times in a row. Before march policy meeting, the labor department will also release February jobs report. A trace data according to the Chicago mercantile exchange, the market generally expect the fed will be meeting in the next two raise interest rates by 25 basis points, respectively.
