June 7, 2023

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Does Powell regret that he did not reject the 75 basis points ratio increase at the next meeting?

Does Powell regret that he did not reject the 75 basis points ratio increase at the next meeting?

Yasser al-Rawashte, head of Saxo Bank’s Middle East business division, said markets were expecting central banks to tighten their monetary policy, pointing to the tightening of monetary policy by Australian and UK banks.

In an interview with Al-Arabiya on Thursday, Al-Rawashdeh added that in the light of earlier expectations that interest rates could be raised by 50 to 75 basis points to control inflation, there are still risks in the markets. The Federal Reserve raised interest rates by 75 basis points.

He was responding to a question at a press conference following a recent meeting of the Federal Reserve, which decided to raise interest rates by half a percentage point and point to other expected increases. Federal Reserve Governor Jerome Powell “The 75-point increase is being seriously considered by the panel.”

Yasser al-Rawashteh said the risks in the markets will continue as war continues in Ukraine, higher energy prices and China closing with higher risks related to inflation. , And it is still possible.

Responding to a question about Jerome Powell’s regret for rejecting the 75-point increase, Saxo Bank’s head of Middle East trading said it was best not to talk about it, as markets continue to anticipate the situation. The increase due to this report, especially because of future risks, is likely to cause the closure in China to continue for a long time.

He described the fall in the dollar as a “short-term weakness” and the challenges to the European and British economies, as well as an increase in US bond yields, which could further strengthen the dollar in the coming years.

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Futures markets offer a high probability that the central bank will raise interest rates by three-quarters of a percentage point at its next meeting in June.

Jerome Powell pointed out that inflation is very high and we know it causes difficulties.

“An additional increase of 50 basis points should be on the table for the next two Federal Reserve meetings,” he added.

He emphasized that the main focus was on reducing inflation to 2%.

On Wednesday, the Federal Reserve decided to raise its key interest rate to half a percentage point, which is an even more serious step in its fight against rising inflation.