After the annual meeting of the Jackson Hole Central Bank, hawks in European and American central banks continued to attack cities and seize territories, and the "pigeon voice" has almost disappeared. The European Central Bank will "violently raise interest rates" next week75A basis point may already be on the line. Local time8month29The latest data from the Eurozone currency market shows that the European Central Bank9Monthly interest rate increase75The probability of a basis point has climbed to67%。 By comparison, investors had originally expected the European Central Bank last week9month8Will raise interest rates again in the future50Basis points. European Central Bank Regulatory CommissionKlaas Knot、Robert HolzmannandMartins KazaksPeople have already expressed their support and support9Increase interest rates at least once a month50Basis points and does not exclude interest rate hikes75Basis points. Encouraged by the expectation of a strong interest rate hike by the European Central Bank,29The Japanese euro also briefly returned above parity against the US dollar. Economist at Oxford Institute of EconomicsMateusz Urbanyes21Century Economic Report reporter stated that the European Central Bank is sending a strong signal that they will do their best to reduce inflation to the target level, and this hawkish sentiment is expected to continue for a certain period of time. The probability of "violent interest rate hikes" to combat inflation is at the cost of sacrificing the economy. Chief Global Market Strategist, JingshunKristina Hooperyes21Century Economic Report reporter stated that inflation in the eurozone is very serious, and the high inflation momentum is difficult to curb. At the same time, the eurozone economy is already under great pressure. Given that most eurozone inflation is not driven by demand, it will be more difficult to curb, so the European Central Bank may "strangle" economic growth before "curbing" inflation. Anyway, the complete transformation of the former "pigeon king" European Central Bank into an eagle fully reflects the seriousness of the current inflation situation, and developed countries' central banks in Europe and America may have no choice. The European Central Bank may raise interest rates by force next week75Basis points Faced with decades of unprecedented high inflation, the European Central Bank announced last month that it would raise three key interest rates50Basis points, with the deposit mechanism interest rate raised to0%The era of negative interest rates has come to an end. Official data shows that the eurozone7Monthly inflation rate as high as8.9%, reaching the highest level in history and also the European Central Bank2%More than four times the target, and inflation is still likely to rise further in the future. This also means that the euro zone announced this Wednesday8The monthly inflation data and the new forecast from the European Central Bank will be the key factors determining the rate hike next week. Economists estimate8monthCPIThe year-on-year growth rate is9%, higher than7Of8.9%。 If8monthCPIOnce again exceeding expectations, the European Central Bank9month8The determination to significantly raise interest rates at the interest rate meeting on the day will become even stronger,75A rate hike of one basis point will also be more realistic. More importantly, even if8The monthly inflation data has not been released yet. From a series of recent official speeches, it seems that vigorously raising interest rates to combat inflation has become the only choice for the European Central Bank at present. The difference is only between hawkish or more hawkish? Next week is a rate hike50A basis point or75A basis point? European Central Bank Regulatory CommissionKlaas KnotHe has already stated that he supports raising interest rates at most at next month's meeting75Basis points. At present, the inflation problem in Europe is very serious, and we need to6Raise interest rates once a week until the inflation rate stabilizes at2%Left and right. Governor of the Austrian Central BankRobert HolzmannIt also means that it should be9Consider raising interest rates at the monthly meeting75Basis points. Despite the imminent economic recession, prioritizing the fight against inflation has become a consensus among almost all officials. Executive Committee of the European Central BankIsabel SchnabelThe possibility and cost of current high inflation becoming deeply entrenched in expectations are disturbingly high, and if inflation expectations break free from anchoring, the impact on the economy will be even more severe. In this environment, the central bank needs to take strong action and steadfastly prevent people from starting to doubt the long-term stability of our fiat currencySchnabelWe also acknowledge the risk of economic recession, but "even if we enter an economic recession, we basically have no choice but to continue our path of normalization. Similarly, members of the European Central Bank's Management CommitteeFrancois Villeroy de GalhauIt also warns that decision-makers must make up their minds to fight record high inflation in order to avoid being forced to take "unnecessary and brutal" interest rate actions in the future. Member of the European Central Bank Management CommitteeMartins KazaksIt seems that the eurozone is highly likely to fall into recession, but this alone is not enough to reduce inflation. The European Central Bank should choose to significantly raise interest rates next month. We should discuss raising interest rates50A basis point or70Maintain an open attitude based on one basis point. From the current situation, at least it should be50Basis points Overall, the European Central Bank has made up its mind to fight inflation.UrbanAccording to an analysis by reporters, despite the imminent risk of economic recession, some European Central Bank officials have recently called for a significant interest rate hike. Considering that inflation remains the only concern of the European Central Bank, it is expected that9The monthly meeting will once again vigorously raise interest rates. In addition, the European Central Bank has also taken note of the weakness of the euro against the US dollar, and the depreciation of the euro has also fueled inflation issues. From various signs, stagflation may become an inevitable outcome for Europe. JPMorgan Chase predicts that by the end of this year, the overall inflation rate in Europe will reach10%Above all, the European Central Bank may also be forced to continue raising interest rates. Affected by the soaring natural gas prices and further interest rate hikes by the European Central Bank, the eurozone economy will enter a "deep recession" by the end of this year. Regarding the current difficulties faced by the European Central Bank, former US Treasury Secretary Summers expressed a pessimistic attitude. Given the inflation, energy price shocks, and geopolitical issues in the eurozone, the work of ECB President Lagarde is much more challenging than that of Powell. The road ahead for Europe will be very difficult, and I suspect that the ECB's rate hike will exceed the market's current expectations, and the local economic recession pressure is also heavy. Inflation persists The sound of pigeons is hard to find In fact, with Federal Reserve Chairman Powell announcing the strongest "hawk" of monetary tightening at the Jackson Hole Central Bank annual meeting last week, the priority of anti inflation has been further elevated, and the "dove voice" among European and American central banks has almost disappeared. From the Federal Reserve to the European Central Bank, the Bank of England, the Bank of Korea... major central banks around the world have issued a straightforward and unified message on the necessity of curbing inflation: they have unanimously declared that inflation is broad-based, will remain high, and requires strong action. International Monetary Fund（IMF）First Vice President Gopinat believes that in the coming years, as global efforts to rectify the job market and supply chain continue to face price pressures, the challenges faced by central bank officials in balancing employment, inflation, and growth will become even more challenging. Gopinat stated that, considering the risk of inflation becoming deeply ingrained, although there may be costs, major central banks need to unanimously maintain a tough stance. It should be noted that, driven by the aggressive interest rate increase policy of the Federal Reserve, the strong dollar has exacerbated inflation in many open economy around the world, and the currencies of many countries have suffered significant depreciation. The strong Federal Reserve has put more pressure on these countries. For example, the Bank of Korea was one of the earliest central banks to abandon monetary stimulus policies during the pandemic. Since last year8Since the beginning of this month, the Bank of Korea has raised its benchmark interest rate200Bps to2.5%。 Bank of Korea Governor Lee Chang yong stated that the Bank of Korea must continue to raise interest rates until inflation rates decrease. At the same time, he acknowledged that the South Korean central bank may not be able to stop tightening policies before the Federal Reserve turns. We are now independent of the government, but we are not independent of the Federal Reserve, "Li Changyong said helplessly. In fact, among developed country central banks, almost only the Bank of Japan is still adhering to dove like policies. Haruhiko Kuroda, governor of the Bank of Japan, believes that Japan's economic situation is different from that of Europe and the United States. The current inflation rate in Japan is2.4%It feels a bit magical, but it is almost entirely due to the rise in international commodity prices, energy, and food. Japan's inflation rate may decrease by the end of this year and next year. Therefore, until wages and prices rise in a stable and sustainable manner, we have no choice but to continue to relax monetary policy However, overall, vigorously raising interest rates to combat inflation remains the main theme globally.HooperAccording to reporters, many central banks are taking action, and some countries' economic data may indeed be worrying. In addition, with the intensification of geopolitical risks and the possible downward adjustment of corporate profit expectations, the market may experience more volatility in the future. For investors, what they can do is to maintain a long-term perspective and diversify their allocation of stocks, fixed income, and alternative assets. On the other hand, although most developed country central banks have shown their "hawk claws" and choose to use "pre interest rate hikes" to combat inflation, in the long run, radical interest rate hikes will eventually come to an end. stayUrbanIt seems that the deteriorating outlook will gradually lead to a resurgence of doves within the European Central Bank and ultimately lead to a pause in interest rate hikes, which may occur as early as2023Occurred at the beginning of the year. Record breaking energy prices may also prolong inflation, delaying the shift in monetary policy by the European Central Bank. (Author: Wu Bin) Editor: He Jia) |
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