The Fed hikes interest rates as scheduled, and the market awaits other central bank decisions

[The Federal Reserve raised interest rates by 25 basis points as scheduled]

At 3 a.m. Beijing time on Thursday, the Federal Reserve announced the latest February interest rate decision. The Fed raised interest rates by 25 basis points as scheduled to 4.50-4.75%, in line with expectations. Judging from the statement of the Fed’s resolution, the Fed’s wording is basically neutral, and the Fed has only made basic revisions to the statement of the previous resolution. Find some clues.

[Powell sees that inflation is falling]

The market basically believes that Powell sees that inflation is falling, and it seems that he is quite confident that inflation will continue to decline. There are two inflation reports before the March meeting. If you see that price pressures continue to ease, then Likely not reaching their dot plot, just one more rate hike is needed, and investors have been pricing in a more dovish outlook than Fed policymakers have signaled, betting that tighter monetary conditions will weaken growth and could lead to a U.S. A recession, which in turn pushes the Fed to switch to rate cuts.

[Powell believes that the Fed will not cut interest rates this year]

Fed Chairman Jerome Powell said projections made by him and his FOMC colleagues suggested that a rate cut this year would be inappropriate. “Given our projected economic outlook, I don't think we will cut rates this year,” he said. ’” He added, however, that if inflation fell faster, then that would affect policy decisions. On the issue of inflation, Powell said, ""We will be cautious in declaring victory against inflation, we are in the early stages of disinflation,"" and it will ""take time"" to win.

[The market expects the Bank of England to raise interest rates by 50 basis points]

Markets are expecting a 50 basis point hike from the Bank of England this time around, but lending data released on Tuesday suggested to some economists that the bank could now consider ending the cycle of rate hikes in early 2023. Sterling has weakened, possibly reflecting market expectations that the Bank of England will scale back rate hikes. 70% of economists expect the Bank of England to raise interest rates by 50 basis points, and money markets are showing similar expectations from investors, suggesting that there are still enough surprises about a 25 basis point hike to prompt further weakness in sterling.

[Russian crude oil exports increase, which is not conducive to oil prices]

Rising crude oil exports from Russia also put downward pressure on oil prices. Crude oil supplies from Russia are still on the rise despite Russia being jointly sanctioned by the Group of Seven (G7) and European Union countries, which has effectively eased market concerns about the outlook for crude oil supplies. Russian crude exports rebounded in the week ended Jan. 27, recouping most of the previous week's losses. Crude oil exports rose by 480,000 bpd, or 16%, to 3.6 million bpd for the week. Shipments from both the Baltic and Pacific ports rose by 310,000 bpd from the previous week.

[IMF raises growth forecast]

In its World Economic Outlook, the IMF expects the global economy to grow by 2.9% (up from the previous forecast of 2.7% in October), rising to 3.1% in 2024. And China's 2023 GDP growth forecast was raised by 0.8 percentage points to 5.2%; the 2024 GDP growth forecast remained unchanged at 4.5%. Some encouraging data from China, the world's second largest economy. As the order of social production and life gradually returned to normal after the ""opening up"", economic activities returned to the expansion range. According to data released by the China Federation of Logistics and Purchasing (CFLP), the Manufacturing Purchasing Managers Index (PMI) rose above the 50 level of the boom-bust line to 50.1, better than the expected 49.8 and the previous value of 47.