I have a lot of events in the morning this

I have a lot of events in the morning this week. T.T I don’t have enough time to write an essay… Still, we need to fully discuss the FOMC analysis tomorrow morning and the BOJ’s concerns for Friday. Today, we’re going to cover the FOMC’s focus for tomorrow early in the morning. Let’s look at some of the focus points..

First of all, as is very well known, the Fed’s economic outlook comes out in March, June, September, and December. Here’s the dot plot. First of all, before we talk about the dot plot, we have the growth and inflation outlook. If the March forecast had a lot of concerns about raising the growth outlook, then let’s see if the growth outlook is revised downward this time. The first quarter GDP came out lower than the market expected. If you look at the GDP NOW now, of course, the U.S. growth forecast for the second quarter is still in the low 3% range, but when the disappointing indicator was released in the middle, it fell to the mid-1% range. As the market is growing concerned that robust U.S. growth could crack, let’s take a look at how the Fed officially views the U.S. economic growth outlook. We need to look at the possibility of a downward revision.

And now it’s a dot chart with a lot of talk and a lot of rides… In March, we saw three cuts within the year… This time, there’s talk that it could be changed to one or two cuts, and the media is paying attention to this. Personally, if the media is already paying attention, I think the market is taking a certain level of consideration. And… Even if it changes to one cut… The market is going to come down anyway… What are you worried about? Mountain is mountain… Water is water… The cut… You can see this kind of reaction. These days, the boldness of the market on interest rate issues almost feels like a whole lot. Lol

Rather, there were some members who were discussing interest rate hikes… Let’s look at how many minority opinions on the dot plot are boldly raising interest rates, and … The mid- to long-term outlook is going to be much more important. There’s been so much talk about cuts within the year, but it’s time to gradually pay attention to the number of rate cuts next year. And recently, among Fed members, in the ECB… And the Bank of Korea is also discussing neutral interest rates quite a lot. Whether the number of members predicting an increase in the LONGER RUN interest rate increases… You can think of this as the trend of neutral interest rates that the Fed is looking at. Let’s see if there’s an upward adjustment.

In connection with this, Powell’s press conference will likely address both of these questions. First, there are mixed growth indicators. Consumer indicators seem to be slowing down. Manufacturing seems to be reeling. Employment is good. Employment indicators are also a little confusing. I think there will be a question about how do you see the growth of the U.S. economy right now. The Fed’s view of U.S. growth is likely to be an issue. As soon as it shows concern about slowing growth, it can be interpreted as a dove.

If you look at the recent FOMC, Powell is a little visible… I feel like I’m attempting to balance mechanically. For example, if dot plots come out hawkish, they show surprise pigeon magic at a press conference to melt the market… And if the dot plot is a little pigeonish… In press conferences, he often creates an awkward atmosphere by saying that the possibility of a rate hike should not be ruled out. As the number of rate cuts on the dot plot is likely to decrease, it is also of interest to see if there will be any points Powell can appease.

And of course, the reporters will ask the question of neutral interest rates. Even among the committee members, there is a disagreement about neutral interest rates, so we will delve into what the Fed’s position is on the dot plot. I wonder what Powell’s answer to this is… (But these days, it’s really easy to get out like a mung-worm…[laughs]

Last but not least… Some of the Fed’s members (especially hawks) are still not closing the possibility of raising the benchmark interest rate. Of course, I also think that possibility is slim… At a press conference, a question will likely arise about the conditions for a rate hike. Given Powell, who says the current monetary policy is in tightening territory… I’m not going to try to open up the possibility of a rate hike, but if you show such a sense of vigilance, you might surprise the market.

Finally, there may be questions about financial market conditions. The stock market is hitting record highs every day, and the housing market is hot. In this situation, the Fed’s monetary policy could stimulate the overheating of the asset market… How can we dry the asset market, which cannot be stopped even at 5.25 to 5.5% interest rates, when lowering interest rates… That may be the question. Questions about the U.S. fiscal deficit and the issue of sticking to inflation are very common… I think that’s what we’re talking about.

Yes.. the Fed’s view of growth, and the evaluation of neutral interest rates, and the reaction to the risk of raising interest rates, and the degree of Fed’s view of financial markets overheating… I can sum it up to this point. I’ll take those things as a basic rule. I’ll see you early tomorrow morning. Thank you.