hike

According to Jinshi reports, ECB Governing Council member Wunsch stated that if service sector inflation rises, the European Central Bank may consider raising interest rates by another 25 basis points to ensure economic safety.

According to Jinshi reports, CME's "FedWatch" shows that the probability of the Federal Reserve keeping interest rates unchanged in July is 60.4%, while the probability of a cumulative rate hike of 25 basis points is 39.6%. By September, the probability of keeping interest rates unchanged is 31.2%, the probability of a cumulative rate hike of 25 basis points is 49.6%, and the probability of a cumulative rate hike of 50 basis points is 19.1%.

According to Jinshi reports, Ritesh Ganeriwal, the investment and consulting director at Syfe, stated that the tightening signals released by the Federal Reserve in its statement suggest that inflation risks have not dissipated, even if the conflict in Iran ends and energy supplies return to normal. Ganeriwal mentioned that while there is still a possibility of interest rate hikes this year, this action is far from certain and the threshold is very high. He pointed out that if a peace agreement between the U.S. and Iran can be maintained and oil prices remain at lower levels, the Federal Reserve may find fewer reasons to raise interest rates.

According to Jinshi, multiple institutions have significant disagreements regarding the future policy direction of the Federal Reserve. Goldman Sachs believes that if inflation does not cool down, the Federal Reserve may raise interest rates in September or in the fall, while Huatai Securities expects rates to remain unchanged in September, with the probability of a rate hike by the end of the year close to 50%. Regarding rate cuts, Nordea Bank believes that cuts may be delayed until 2027, while Citigroup expects cuts in 2026. Other institutions such as JPMorgan Chase and CITIC Securities tend to favor maintaining the current policy.

According to Jinshi reports, the Federal Reserve's "hawkish" tone is rising tonight, and expectations for interest rate hikes are strengthening. After taking office, Waller shortened the statement, established a working group, and is conducting a comprehensive review of external communication methods.

According to Jinshi reports, CME's "FedWatch" shows that the probability of the Federal Reserve keeping interest rates unchanged until July is 64% (91% before the decision), the probability of a cumulative rate hike of 25 basis points is 35.1% (8.9% before the decision), and the probability of a cumulative rate hike of 50 basis points is 1% (0% before the decision). By December, the probability of keeping interest rates unchanged is 14.2% (38.2% before the decision), the probability of a cumulative rate hike of 25 basis points is 36.4% (43% before the decision), the probability of a cumulative rate hike of 50 basis points is 33.8% (16.2% before the decision), the probability of a cumulative rate hike of 75 basis points is 13.5% (2.4% before the decision), and the probability of a cumulative rate hike of 100 basis points is 2.1% (0.1% before the decision).

According to Jinshi reports, U.S. President Trump stated that there is no problem with the Federal Reserve keeping interest rates unchanged and mentioned the possibility of a rate hike.

According to Jinshi, Ryan Detrick, Chief Market Strategist of Carson Group, stated that the meeting hosted by Waller for the first time did not cause much of a stir. The market realizes that inflation is clearly heating up, but the economy remains resilient. The market generally expects that there is a high probability of no interest rate cuts this year, which has been further confirmed. The next question is whether there will actually be an interest rate hike, or if the Federal Reserve will remain on the sidelines for the rest of the year.

According to Jinshi reports, foreign media analysis points out that nearly half of the Federal Reserve decision-makers no longer believe that merely maintaining stable borrowing costs can drive the inflation rate back to the target level of 2%. The latest dot plot from the Federal Reserve shows that decision-makers' views on the interest rate path have shifted towards concerns about rate hikes, with some individuals convinced that the Federal Reserve will need to raise rates. Predictions indicate that the year-on-year increase in the PCE price index is expected to reach 3.6% by the end of the year, the core PCE price index will reach 3.3%, and the unemployment rate will remain at 4.3%.

According to Jinshi News, Michelle, the head of global fixed income at JPMorgan Chase, stated that there may be two interest rate hikes this year.

According to Jinshi reports, U.S. Treasury yields rose after Federal Reserve officials hinted at a possible rate hike. The yield on the 10-year U.S. Treasury is currently reported at 4.465%, while the yield on the 2-year Treasury, which is more sensitive to short-term rate expectations, is reported at 4.138%.

According to Jinshi reports, the Federal Reserve FOMC statement shows that out of 18 FOMC participants, 9 expect to raise interest rates in 2026.

According to Jinshi reports, Bank of Japan Deputy Governor Shinichi Uchida stated that today's decision took into account the risk of needing to raise interest rates significantly if policy adjustments are delayed.

According to CoinDesk, Bitcoin traders need to pay attention to the Bank of Japan's interest rate decision on Tuesday this week. As of the week of June 9, the speculative short positions in yen held by leveraged funds have increased to over 115,000 contracts, the highest since November 2017. If the Bank of Japan raises interest rates to 1% as expected and hints at further tightening, these shorts may be covered, leading to a rise in the yen, which would impact yen-funded arbitrage trades.Arbitrage traders borrow yen to invest in high-yield risk assets, which have driven bull markets on Wall Street and in the bond market for years, and are also believed to support the crypto market. After the Bank of Japan raised interest rates in July 2024, the rapid covering of yen shorts led to a significant rise in the yen, causing severe fluctuations in Wall Street, the Nikkei index, and the crypto market, with Bitcoin dropping from about $65,000 to $50,000 within a week. If after this rate hike, Governor Ueda Kazuo hints at faster tightening or that rates may rise above 1%, the yen will strengthen significantly, causing turbulence in the financial markets. Crypto assets are the most sensitive to sudden changes in liquidity and may be impacted the most severely.

According to Jinshi reports, Krishna Bhimavarapu, an economist at State Street Global Advisors in the Asia-Pacific region, stated that supported by enhanced economic resilience and rising inflation, central banks around the world may be entering a phase of synchronized interest rate hikes. Bhimavarapu pointed out that the Bank of Japan seems ready to raise interest rates to the psychological key point of 1% and may hint at a second rate hike this year. In contrast, the Reserve Bank of Australia appears to be pausing interest rate hikes due to weakening economic growth and labor market momentum, but the inflation issue remains unresolved, potentially leaving room for at least one more rate hike. Bhimavarapu expects that the Federal Reserve may shift to a hawkish stance by the end of this week.

According to Jinshi, U.S. 10-year Treasury futures rose by 10 points, and federal funds rate futures increased as the market lowered its expectations for a rate hike by the Federal Reserve.

According to Jinshi News, European Central Bank Governing Council member Kazimir stated that the interest rate hike task is not yet complete.

According to Jinshi reports, European Central Bank board member Kaasik stated that the main reason for the interest rate hike is the concerning surge in inflation. He pointed out that it is difficult to say when the European Central Bank's next interest rate hike will come.

According to Jinshi reports, ECB Governing Council member Nagel stated that even if the war ends quickly, the interest rate hike this week is still necessary.