See how much the Fed will raise interest rates this time

According to data, the annual rate of the US unadjusted CPI in June was as high as 9.1%, and commodity prices across the United States generally rose. In this context, the Federal Reserve will choose to raise interest rates faster to cope with inflation. So, how much will the interest rate be raised?

July 5

Ebury, a monetary research institution: The Federal Reserve may slow down the pace of interest rate hikes.

Matthew Ryan, head of market strategy at Ebury, a currency research firm, said that he believes the Fed is unlikely to raise interest rates by another 75 basis points, which is at least mildly positive for the euro and risk assets in general, especially considering that the market expects about three-quarters of the chance of raising interest rates by this amount at the FOMC meeting on July 27. Inflation may ease in the coming months as food and energy prices stop rising and even fall in some cases.

July 7

Analyst Ira Jersey: The minutes clearly put the option of a 75 basis point rate hike in July on the table, and the market has basically digested this. The U.S. Treasury yield curve has not reacted much, but if the rate hike is 75 basis points in July, it may accelerate the trend of the curve flattening. If the rate hike is 50 basis points, it may steepen moderately in the short term, and this situation may resume as the Fed makes more rate hikes.

July 13

Traders fully price in Fed's 75bp rate hike in July

Money markets are betting the Federal Reserve will raise interest rates by 75 basis points later this month, betting the United States will need to accelerate the pace of monetary tightening to curb inflation.

“I think the 75 basis point rate hike in July is a fait accompli and the Fed needs to remain aggressive now so it can assess the situation in September and potentially take a less aggressive tightening path in the fourth quarter,” said Kristina Hooper, chief global market strategist at Invesco Asset Management.

Peter Chatwell, head of global macro strategy trading at Mizuho Group, said there may be room for a small increase in the 75 basis point expectation at the July meeting in case the Fed feels the need to apply the brakes more quickly.

July 14

Nomura Securities economists: The Federal Reserve is expected to raise interest rates by 100 basis points at its July meeting.

Market speculation: The Federal Reserve may follow the Bank of Canada and raise interest rates by 100 basis points

The higher-than-expected U.S. inflation rate triggered a sharp decline in the U.S. bond market. After the Bank of Canada unexpectedly raised interest rates by 100 basis points, the market began to speculate whether the Federal Reserve would follow suit and raise interest rates by 1 percentage point this month.

George Goncalves, head of U.S. macro strategy at Mitsubishi UFJ, said: "The current Fed has an inflation problem, and their tightening policy cannot be shaken even if there are some signs of recession. If the Fed raises interest rates to 4% and the 10-year yield remains at 3%, the yield curve may invert by 50 basis points, which will be a manifestation of a 'quasi-stagflation environment'." The difference between the U.S. 2-year and 10-year Treasury yields is approaching the lowest level in 2006 at minus 21 basis points. "

Traders are betting the Fed will need to hike rates more aggressively than it did in June.

Higher-than-expected inflation data prompted traders to bet that the Fed will need to implement a more aggressive rate hike than in June. "I think they have time, if they want, to change market expectations to 100 basis points," said Michael Feroli, chief U.S. economist at JPMorgan Chase. "I don't think the Fed has given a good reason why they should slow down or take a so-called gradual approach." He said, "If you really raise rates by 100 basis points in July and 75 basis points in September, I think the economic growth outlook later this year may deteriorate. At this point, I tend to think that the main impact of the data may be to prompt the Fed to raise rates more sooner."

Citigroup believes that the Fed's July rate hike of 100 basis points is the most likely

Citi economists now believe that a 100 basis point rate hike by the Federal Reserve in late July is the most likely outcome.

“The committee indicated in June that it would respond to inflation data each month,” said Citigroup economists Andrew Hollenhorst and others. “We now expect the Fed to raise rates by 100 basis points at its meeting later this month.”

CITIC Securities: There is a possibility that the Federal Reserve will raise interest rates by 100 basis points in July

CITIC Securities pointed out that the US CPI in June once again broke through the high point and market expectations. The high prevalence and high inertia of inflation, especially core inflation, are worrying. Although if commodity prices (especially energy prices) continue to fall in the future, it may push inflation back, but core inflation is expected to remain highly sticky. After the data was released, 10-year inflation expectations rose sharply. In order to control inflation expectations, the Federal Reserve may raise interest rates by 100 basis points in July.

July 15

Industrial Bank: The Federal Reserve is expected to raise interest rates by 100 basis points in July

Societe Generale said in a note that it expects the Federal Reserve to raise interest rates by 100 basis points at its upcoming policy meeting, noting that both job growth and inflation exceeded expectations in June.

Analyst Stephen Gallagher said that inflation is particularly worrying given that rents and related factors are sticky and closely related to a tight labor market. But the possibility of lower or even negative GDP data in the second quarter may limit the Fed's 75 basis point rate hike. The final interest rate is still expected to be 3.40%, and the first rate cut is expected to take place in early 2024.

July 18

June "spoiler" Fed raises interest rates by 75 basis points Reporter: The Fed may raise interest rates by another 75 basis points in July

Wall Street Journal reporter Nick Timiraos reported that Federal Reserve officials hinted that they may raise interest rates by 75 basis points for the second time in a row at the interest rate meeting later this month as part of an aggressive measure to combat high inflation. It is reported that the reporter revealed the 75 basis point rate hike the day before the Fed announced its interest rate decision in June.

Institutional analysis: The Federal Reserve is raising interest rates at the fastest pace in decades

Jon Turek, founder of JST Advisors, said that with inflation higher than expected and commodity prices high, we may be facing an unprecedented "doom loop" for the dollar. Given that the Fed is raising interest rates at the fastest pace in decades, it is unclear what will break this feedback loop in the coming months. It is hard to see what can stop this. My best guess is that it may stop on its own, depending on how bad the economic growth situation is, especially after the September FOMC meeting, when we really enter the end of the year, we have to start thinking about: Can the Fed make an implicit switch from interest rates to global economic conditions?

Viewpoint: CPI rise may strengthen the Fed's determination to raise interest rates again in July

Daniel Hynes, commodity strategist at ANZ Bank: Gold prices fell to an 11-month low as investors shunned gold in favor of the dollar amid heightened risk aversion in the market. Rising CPI may strengthen the Fed's resolve to raise interest rates sharply again later this month.

July 19

Goldman Sachs Chief Operating Officer Waldron: The Federal Reserve is acting actively and appropriately, and it is expected that the interest rate (at the end of the year) will be around 3%.