In the current environment of poor global economy and uneasy financial markets, the release of the minutes of the latest meeting of the Federal Reserve provides important guidance and reference for the market. Although this is the record and opinion of the Federal Reserve meeting in December last year, the prediction of the current market trend in the new year provides important guidance. Combining the passive and simplistic situation of being kidnapped by market public opinion last year, our analysts focused on discussing their views on this matter, and everyone expressed their opinions. This is a good diversification of coping ideas and forecast reference for market comparative analysis and research. As a professional, empirical, independent and predictable think tank, CFIRI's analysts adhere to realistic, independent and independent research methods and ideas, which may be more inspiring for market research.
At present, the determination of the Federal Reserve to raise interest rates to curb inflation has not changed. However, with the correction of commodity prices in the early stage, the slowdown in inflation also caused a time lag effect in the effect of monetary policy. As a result, the market showed a slowdown in interest rate hikes. This may be the Fed’s consideration of interest rate policy. Consider short-term factors that are too high risk of falling into recession. However, the market interprets it as the incentive and trend of interest rate cuts in the second half of 2023. From the perspective of the Federal Reserve, it clearly conveys that the Fed’s determination to monetary policy is not weakened. If the financial environment such as the determination to adjust the pace slows down or leads to a decline in market interest rates, the Fed’s efforts to restore price stability will be more complicated. In addition, the current market expectation that the Fed will slow down rate hikes this year does not mean that it will stop raising interest rates, especially long-term interest rates have not met the Fed's expectations. Therefore, it is expected that the Fed will maintain a tight monetary policy in 2023 with a high probability to achieve its long-term control intentions, and the specific tightening point may still revolve around the current economic situation and labor performance.