The Global Central Bank Annual Meeting Approaches, Fed Officials Speak Frequently

Next Friday, the global investment community will focus on the Jackson Hole Global Central Bank Annual Symposium held in Wyoming. Fed Chairman Powell will give a speech at the meeting discussing the economic outlook, which may provide important clues for the future direction of interest rates in the United States.

Before Powell's speech, several senior officials from the Fed have recently made tough statements, seemingly setting the tone for the upcoming annual meeting. Observers expect that Powell is likely to continue this tough stance, further emphasizing the Central Bank's determination to curb inflation and control price increase expectations.

Last Friday, Richmond Fed President Barkin stated that the Fed must maintain its fight against inflation even if it may lead to an economic recession. The day before, three Fed officials also expressed similar hawkish views.

St. Louis Fed President Bullard is inclined to raise interest rates significantly by 75 basis points again in September. He emphasized that the policy rate should be quickly increased to a level that can put significant pressure on inflation and questioned the necessity of postponing rate hikes until next year. Bullard believes that the current economic interpretation is relatively accurate and that the inflation rate remains high, so it is reasonable to continue raising rates to a range that can control inflation.

Kansas City Fed President George shares a similar view. She pointed out that although inflation in the U.S. may be easing, it remains high, and it is still too early to declare victory over inflation.

San Francisco Fed President Daly suggested that the Fed should slightly raise interest rates to above 3% by the end of the year to curb inflation. She stated that the specific rate hike in September will depend on future economic data, with both 50 and 75 basis points possibly being appropriate choices. Daly also emphasized that the Fed does not want the market to perceive its policy path as "hump-shaped", meaning a rapid rate hike this year followed by significant cuts next year.

These hawkish remarks seem to have impacted the cryptocurrency market, with a significant drop in cryptocurrency prices last Friday.

Ann-Katrin Petersen, a senior investment strategist at BlackRock Investment Institute, believes that to achieve the 2% inflation target, the Fed will have to suppress economic growth. However, to promote economic growth, the Fed may ultimately accept a status quo of coexistence with higher inflation. This policy shift may not occur until 2023, later than the market currently expects.