首页 News 正文

Summers warning: The possibility of the Federal Reserve misestimating neutral interest rates and not lowering them this year is increasing

白云追月素
232 0 0

On Friday, March 8th local time, renowned financial commentator and former US Treasury Secretary Lawrence Summers warned that the Federal Reserve's assessment of neutral interest rates was wrong, and the likelihood of decision-makers ultimately not cutting rates this year has increased.
Summers said, "Things have fundamentally changed, and I'm not sure if the Federal Reserve is fully aware of this. Neutral interest rates are much higher than the 2.5% that the Fed likes to talk about."
The so-called neutral interest rate refers to the level of interest rates that neither stimulate the economy nor drag down the economy. Federal Reserve officials currently generally consider 2.5% as a neutral interest rate, but some doubt whether 2.5% meets the level of a neutral interest rate.
The Federal Reserve initiated a rate hike cycle in March 2022, and after 11 rate hikes, the target range for the federal funds rate reached 5.25-5.5% in July last year. Since then, the Federal Reserve has remained silent at interest rate meetings for four consecutive times.
Summers said, "When the Federal Reserve compares a 5% interest rate to what it considers to be a neutral interest rate of 2.5%, it is wrong to say that monetary policy is actually restrictive."
He pointed out that the neutral interest rate is much higher than the level perceived by the Federal Reserve, closer to 4% rather than 2%.
Federal Reserve Chairman Powell stated at a congressional hearing on Thursday that current interest rates have entered a restrictive range, far above neutral levels. He said that the Federal Reserve is not far from obtaining the confidence needed to lower interest rates.
Summers said the possibility of not lowering interest rates this year is increasing
Summers called on the Federal Reserve to be extra cautious when initiating interest rate cuts. He also warned that the current bet in the financial market on this year's interest rate cut may be too high, and if people believe that the Federal Reserve will inevitably cut rates this year, they are completely wrong.
Summers cited non farm payroll data from the United States in February, stating that while the unemployment rate has risen to a two-year high, wages continue to rise, reflecting a strong economy.
The data released on Friday showed that the non farm payroll in the United States increased by 275000 people after the quarterly adjustment in February, significantly higher than the market expectation of 200000 people; The unemployment rate unexpectedly rose to 3.9% in February, a new high since January 2022, and the market was originally expected to remain unchanged at 3.7%; The average hourly wage in February increased by 0.1% month on month, with a year-on-year increase of 4.3%.
Summers pointed out that he had stated last month that the probability of the Federal Reserve not cutting interest rates this year was about 15%, and now this number may have slightly increased.
CandyLake.com 系信息发布平台,仅提供信息存储空间服务。
声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
您需要登录后才可以回帖 登录 | 立即注册

本版积分规则

  •   苹果知名分析师郭明錤周四(10月31日)在社交媒体上发文表示,苹果明年可能会减少对芯片制造商博通Wi-Fi芯片的依赖,并推出自己的处理器。   郭明錤在社交媒体平台X上写道,“在2025年下半年的新产品(例如iPh ...
    uturn
    昨天 14:42
    支持
    反对
    回复
    收藏
  •   10月30日,小鹏汽车生态企业小鹏汇天宣布,旗下分体式飞行汽车“陆地航母”即将亮相2024中国航展,11月12日将在中国航展第二展区(斗门莲洲)进行全球首次公开飞行,同时“陆地航母”也将在珠海国际航展中心8号 ...
    yxtianyouyou
    前天 11:43
    支持
    反对
    回复
    收藏
  •   交易所监管文件显示,当地时间11月1日,亚马逊创始人杰夫·贝索斯拟出售约1635万股亚马逊股票,预计套现约30.5亿美元。今年7月,贝索斯已申请额外出售约2500万股亚马逊股票,按当时股价计算可套现约50亿美元。 ...
    blueskybb
    10 小时前
    支持
    反对
    回复
    收藏
  •   近日,凯撒海湾目的地(山东)运营管理有限责任公司(简称“凯撒海湾”)与携程旅悦集团签署战略合作协议,双方将围绕“海上目的地运营”、“旅游产品与服务创新”、“研学旅行”、“日韩及海外旅游市场开拓”等 ...
    llyyy2008
    9 小时前
    支持
    反对
    回复
    收藏
白云追月素 注册会员
  • 粉丝

    0

  • 关注

    0

  • 主题

    39