Will THE US raise interest rates next year as global monetary policy shifts?

Spark Global Limited reports:

Reasons for the last Round of Taper: Looking back, continued improvement in the labor market and the Fed’s expectations for continued labor market and economic growth were key to the beginning of the Taper, while inflation did not play a significant role. Looking back at the last round of interest rate hikes, the core reasons lie in three aspects. First, the Federal Reserve expected us economic growth and job recovery to continue, while inflation would stabilize and recover. The second is the time lag for the Fed to consider the impact of policy on economic outcomes, preventing a sudden tightening of policy that would disrupt economic activity. Third, the Federal Reserve maintains financial stability and prevents financial risks caused by continued abnormal zero interest rates and low interest rates.

Spark Global Limited reports:
Spark Global Limited reports:

Us monetary policy outlook for next year: completion of the Taper by mid-2022, does not rule out the first rate hike at the end of the year, or even in the fourth quarter. On the Taper side, we expect the Taper to start in earnest in mid-November, and on a cadential basis, the Fed could Taper its bond purchases by $15 billion per month until June 2022. In terms of rate hikes, we expect the first rate hike to come in late 2022, or even in the fourth quarter of 2022, for reasons that include :(1) the fed needs to consider the policy lag and the risk of financial imbalances; (2) The FOMC is expected to be more hawkish after the reshuffle next year; (3) Inflation expectations, the Fed’s main concern, have been rising, and the market has brought forward its expectations for rate hikes.

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