US media: Although the Federal Reserve has suspended interest rate hikes, it is still difficult to avoid a "hard landing" for the US economy
US bond trader
On June 15th, according to Bloomberg, after the Federal Reserve announced a pause in interest rate hikes on June 14th, bond traders were skeptical of the ability of US policymakers to avoid a "hard landing" in the economy, and a large number of Americans also believed that the Federal Reserve would lead the economy into recession.
On June 14th local time, the Federal Reserve ended a two-day monetary policy meeting and announced that the target range of the federal funds rate would remain unchanged from 5% to 5.25%. This is the first time the Federal Reserve has suspended interest rate hikes since March 2022, after 10 consecutive rate hikes. The economic outlook forecast released by the Federal Reserve on the same day showed that the median forecast of the federal funds rate by Federal Reserve officials for this year has risen from 5.1% in March to 5.6%, indicating that interest rates will continue to rise this year.
In the US bond market on the same day, the front-end treasury bond bonds susceptible to policy were sold off, while the price of longer-term bonds rebounded. The report states that this price trend indicates that bond traders are skeptical of the ability of US policymakers to avoid a "hard landing" in the economy.
![US media: Although the Federal Reserve has suspended interest rate hikes, it is still difficult to avoid a "hard landing" for the US economy](https://a5qu.com/upload/images/1a289b5eab680885e5b83bd5aa0cbb09.jpg)
George Gonsalves, US Macro Strategy Director at Mitsubishi UFJ Financial Group, said, "The Federal Reserve has made a policy mistake of acting too simply and rudely for a long time. Now, the Federal Reserve is ignoring the sustained losses caused by intensified credit contraction and rising interest rates. This may correct past mistakes, but it has also committed another policy mistake."
The report states that bond traders are not the only ones increasingly concerned about the outlook for the US economy. The media poll results show that 61% of respondents believe that further tightening of monetary policy by the Federal Reserve will lead to a recession in the US economy at some point in 2024.
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