Skip 定了？又有两名联储鹰派"支持 9 月不加息"

On Thursday local time, two senior officials from the Federal Reserve expressed their support for another pause in interest rate hikes in September, but emphasized that the labor market and economic momentum remain strong and inflation may make a comeback, indicating that the tightening monetary policy is not yet over.

Two Hawks Support Skipping September

Lorie Logan, the Dallas Fed President and a hawkish voter, made a rare dovish statement at an event at the Dallas Business Club:

"I don't believe we have eradicated excessive inflation yet. But in today's complex economic environment, it takes a cautious approach, rather than endless cold water, to bring inflation back to the 2% level."

Logan believes that it was wise for the Fed to skip the rate hike in June, and that September is a suitable time for "another skip".

She also pointed out in her speech that the recent tightening of the financial environment may offset the need for further rate hikes, but she still insists that the labor market and the economy are hot. Logan believes that the recent easing of price pressures does not necessarily translate into "sufficiently low inflation," and added that "there is work to be done," without mentioning "ending rate hikes" in her wording. Some market analysts believe that this means the Fed may continue to tighten the money supply in the fourth quarter.

Earlier on the same day, John Williams, the New York Fed President and a permanent voter on the FOMC, also stated that the monetary policy is currently in a "good position" and supports skipping the rate hike in September.

He stated that the monetary policy is producing expected effects of balancing supply and demand and easing inflation. At the same time, Fed officials must assess the level of interest rates that can ensure inflation continues to decline to the 2% target.

He emphasized that the Fed will closely analyze economic data to ensure that interest rates are at a "sufficiently restrictive" level in order to control inflation in a timely manner.

On Thursday, the yield on the two-year U.S. Treasury note widened by nearly 8 basis points, hitting a daily low of 4.9385% during Williams' speech.

Dovish Officials Suggesting the End of Rate Hikes is Near

In addition, two dovish officials from the Federal Reserve also hinted on Thursday that the rate hike process is nearing its end, and now what is needed is to wait for the tightening policy to take effect.

Austan Goolsbee, a dovish official within the Fed and the Chicago Fed President, stated:

"We will soon no longer be discussing how high the interest rate should be raised. What we need to discuss is how long we need to keep the interest rate at this level in order to determine that we are on the path to the target inflation rate.

We are bringing more supply and demand back into balance, and we have seen many components of inflation decline. But overall inflation levels are still higher than we would like.

We need to see this situation continue in order to truly feel that we are on the right track.

We know that inflation in the service sector is more persistent, so we hope to see progress in these areas. Fortunately, we have already begun to see some signs."

Raphael Bostic, the Atlanta Fed President, stated on Thursday:

I am pleased to say that we have seen a decrease in inflation. I believe we are currently in a policy-constrained environment. Now we just need to let this constraint take effect.

The current core inflation rate is still more than twice our target of 2%, so there is more work to be done.

Will there be another rate hike in October and November?

Since March 2022, the Federal Reserve has completed 11 rate hikes, totaling 525 basis points, and the federal funds rate has reached 5.25-5.5%, the highest level in 22 years.

Before the officials' intensive speeches on Thursday, another hawkish official, Christopher Waller, made a dovish statement on Tuesday.

He pointed out that the US economic data does not indicate an immediate need for the Fed to take any monetary tightening measures, but it still takes time to determine whether the recent slowdown in inflation is a "trend" or a "fluke".

Waller said in an interview with the media:

"I am very cautious about the idea of ending the task of fighting inflation until we see inflation persist along this trajectory for several months."

Federal Reserve Chairman Jay Powell has also stated that the next interest rate decision should be approached with "caution".

Futures market pricing shows that currently, the majority of federal funds traders believe that the Fed will skip a rate hike in September.

However, there are still two interest rate meetings in November and December this year. The market expects that the Fed may raise rates by 25 basis points at least once during one of these meetings.