Jerome Powell, Chairman of the U.S. Federal Reserve. [로이터 = 연합뉴스]
There is tension among investors looking at the domestic stock market next week. This is because the announcement of the Beige Book (economic trend report) by the U.S. Federal Reserve (Fed) has been announced. As US consumer prices also exceeded expectations and the Federal Reserve appears to be drawing the line on interest rate cuts again, the market is delaying the Fed’s interest rate cut until September.
According to securities sources on the 13th, the Federal Reserve will announce the Beige Book on the 17th. The Beige Book is the Federal Reserve’s economic assessment report that allows you to check the latest indicators of the U.S. economy.
In particular, what attracted investors’ attention was the contents of last month’s Beige Book. Previously, the Beige Book diagnosed that economic activity in the United States has generally increased slightly. The Fed reported “slight” to “moderate” growth in eight of the 12 regions.
As the outlook for the remainder of this year was evaluated as “generally positive,” it became one step further away from an interest rate cut.
As consumer prices rebounded, the market also accepted the shock. On the 10th (local time), the U.S. Department of Labor announced that the U.S. Consumer Price Index (CPI) in March rose 3.5% compared to the same month last year and 0.4% compared to the previous month. The increase rate was higher than the February increase rate (3.2%) and even exceeded experts’ expectations, shocking the market.
On this day, the New York stock market was weak, with the three major indices falling by around 1%.
As expectations for an interest rate cut in June have virtually disappeared, there are even rumors of an interest rate cut in September. An interest rate cut was expected in March at the beginning of the year, but it was later pushed back to June, and there are speculations that the interest rate cut could be delayed again until September.
At a recent press conference, Chairman Powell also stated that “strong job growth alone does not mean we need to worry about inflation.” There is an analysis in the market that this is a remark that predicts the path the job market will take to some extent.
Lee Young-joo, a researcher at Hana Securities, said, “Although the Federal Reserve insisted on pivoting three times at the Federal Open Market Committee (FOMC) in March, it may be burdensome to rush to cut interest rates.” “We may be able to find the right time to cut interest rates,” he said.
2024-04-13 12:35:14
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