Central banks' different policies raise expectations and suspense
The central banks of the United States, Europe and other developed economies recently announced latest interest rates, showing that while their overall inflation is on a downward trend, core inflation remains relatively strong.
The US Federal Reserve first announced it would stop interest rate hikes after 10 consecutive rate hikes since March 2022, and raised its forecast for the US economic growth to 1 percent from 0.4 percent in March. Inflation data in May continued to slow down, indicating that the decision was in line with market expectations. However, after announcing a pause in interest rate hikes, the economic outlook released the same day showed the median forecast for the federal funds rate rose from 5.1 percent in March to 5.6 percent, suggesting another rate increase was still on the way. Several senior Fed officials said that "the full effects of tightening policy have yet to be felt" and that inflation remains too high.
This possibility of the Fed continuing to raise rates in July is not small, but market institutions believe the Fed will not raise rates any longer, saying "if the Fed thinks it needs to raise rates by an additional 50 basis points, why not now?"