Neel Kashkari, president of the Federal Reserve Bank of Minneapolis and a voter on the Federal Open Market Committee (FOMC) this year, said on Tuesday (7th) that January’s strong job market report showed that the Fed’s The Fed’s policy tightening has done little to cut labor and factories and may have to raise interest rates to at least 5.4% to curb high inflation.
In an interview with CNBC on Tuesday, Kashkari said that his current view on the terminal interest rate is still around 5.4%, because the United States added more than 500,000 non-farm jobs in January, showing that the job market has not yet cooled down, so there is no further increase. Signs that interest rates could be lowered. Kashkari is one of the Fed’s hawks, who last month forecast a policy rate of 5.4 percent.
The number of new non-agricultural jobs in the United States in January was reported at 517,000, which was much higher than market expectations of 185,000, and the revised value was 260,000, a new high since July 2022; the unemployment rate for the month was 3.4%, lower than the market The expected 3.6%, the previous value was 3.5%, a 53-year low.
At the same time, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, also said yesterday that the U.S. non-agricultural employment report in January far exceeded expectations, which may mean that the U.S. central bank must do more work. If the economy continues to overheat, the end Interest rates may be higher than previously expected.
Postik forecasts two more rate hikes by the Fed, to a terminal rate of 5.1%, and remaining there through 2024, in line with the Fed’s December forecast, but he may On this basis, it is supported to raise interest rates by 1 yard, and even 2 yards are not ruled out (that is, the terminal interest rate exceeds 5.6%).
The Fed’s tightening of monetary policy was accompanied by a simultaneous balance sheet reduction (QT) of up to $95 billion per month, resulting in nearly $450 billion in additional tightening. Still, while inflation has moderated, it remains well above the Fed’s target and policymakers have hinted at further rate hikes. “I don’t see the central bank making enough progress to declare success beating inflation,” Kashkari said.
Before the deadline, the major U.S. stock futures indexes were mixed. The Dow futures fell 0.13%, the S&P 500 futures edged up 0.6%, the Nasdaq 100 futures rose nearly 0.3%, and the U.S. 10-year bond yield rose to 3.63%, and the dollar index rose to 103.56. In addition, the market is also focusing on the speech of Fed Chairman Jerome Powell later.
