The Fed accelerates the reduction of bond purchases Everbright Securities Gao Ruidong: It is expected to raise interest rates at the end of next year

As the economy continues to recover and prices rise rapidly, the U.S. Federal Reserve has made substantial adjustments to its previous judgments and monetary policies at its last interest rate meeting in 2021. It not only deleted the fact that “high inflation is a temporary factor”. It will also double the rate of taper purchases, from 15 billion U.S. dollars a month to 30 billion U.S. dollars, which means that debt purchases will end in March next year.

Does this mean that the US interest rate hike cycle is getting closer?

Currently, the market has mixed views on the timing of the Fed's rate hike.

Gao Ruidong, chief macro economist at Everbright Securities, believes that long-term inflation expectations in the United States are still anchored at a relatively stable level, and the supply chain tightening and labor shortage in the United States have eased marginally, reducing core inflationary pressures.

Therefore, from the perspective of inflation, the urgency of the Fed to raise interest rates is not strong.

Gao Ruidong judged that the Fed is accelerating the taper to reserve policy space, and the probability of accelerating interest rate hikes is still low. It is expected that the Fed will raise interest rates once at the end of 2022.

Zhong Zhengsheng, chief economist of Ping An Securities, predicts that the Fed may raise interest rates for the first time in May 2022...

For details, please read the 296th "Hong Kong 01" Electronic Weekly Report (December 20, 2021) "The

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