On the evening of May 23, the United States announced the initial Markit services and manufacturing PMI for May.。According to the data released, the initial value of the Markit services PMI recorded 55 in May..1, above the boom-bust line, above the expected value of 52.5 and previous value 53.6 and set a 13-month high。However, the initial Markit manufacturing PMI for May recorded a decline, with the data published at 48.5, less than the expected 50, also lower than the previous value of 50.2, a three-month low, back below the 50-year-old line.。

 

Mixed U.S. services, real estate data bright manufacturing PMI initial value back below the 50-year-old line.

 

As the services sector accounts for a large proportion of the U.S. economy, last night's bright services PMI data once boosted market confidence, the dollar index rose 40 points in the short term, while the recent volatility of more spot gold plunged nearly 0.2%。However, the manufacturing data is not as expected to the market cast a layer of haze, gold immediately short-term rise, the U.S. index is giving back gains, and continue to fall。

In addition, according to data released by the Richmond Fed, the Richmond Fed Services Revenue Index recorded -10 in May, better than the previous value of -23, but still in the negative range;。

In real estate, the annualized total number of new home sales in the U.S. in April was announced at 68.30,000, better than expected 66.50,000 households and previous value of 65.60,000。Specifically, U.S. new home sales unexpectedly rose last month to their highest since March 2022, suggesting that builders continue to benefit from low inventories in the second-hand housing market.。

According to data released by the U.S. Department of Commerce on Tuesday, sales of single-family new homes increased by 4% in April from March..1%, to an annual rate of 68.30,000 sets。In terms of home prices, the median sale price of homes sold last month was 42.$080,000, with an average price of 50.$10,000。As of the end of April, the inventory of homes for sale was 43.30,000 units, equivalent to 7.6 Months of Supply。

In terms of data, the U.S. services and real estate sectors performed more brightly, but the poor performance of manufacturing data made the overall data released last night somewhat mixed.。But because the services sector accounts for a larger share of the U.S. economy, overall, the resilience of the U.S. economic recovery is still reflected.。

 

Powell still worried about inflation Kashkari said he would not rule out another interest rate hike in July.

 

On Tuesday, the impasse over the U.S. federal debt ceiling continued。It is worth noting that the Federal Reserve Chairman Jerome Powell (Jerome Powell) also participated in the closed-door meeting held by House Democrats, people began to expect that the "Fed top leader" will not disclose information about the current monetary policy at the meeting.。

Disappointingly, according to media reports, Powell only talked about the overall economic issues at the meeting, while the debt ceiling issue and monetary policy issues "avoided talking," only said that "the Fed does not have the tools to mitigate the impact of the U.S. government debt default."。

However, according to Ann Kuster, a congressman from New Hampshire who also attended the meeting, Powell gave them the impression that "things are starting to improve, but inflation is still in the 4-5% range," so "he still has concerns."。

On Friday, Powell, attending a monetary policy seminar, hinted that the contraction in banking credit conditions could, to some extent, help the Fed meet its tightening targets, which it was originally intended to hit with policy instruments such as interest rate hikes.。Powell said: "Banking pressures may mean that there is no need to continue raising interest rates to the previously expected highs to curb inflation.。"

Obviously, based on previous information, it can be roughly judged that, on the one hand, Powell acknowledged the improvement in inflation and noted the relief of the credit crunch on the Fed's interest rate hike pressure;。

Apparently, the other commissioners are aware of this as well.。Earlier, the so-called "new eagle king" of the Apolis Fed President Neel Kashkari (Neel Kashkari) has said that at next month's meeting, he will vote to raise interest rates again or suspend interest rates, this is a "close call" decision.。

Kashkari to vote at next monetary policy meeting as FOMC vote committee。If the Fed's vote at this meeting is to suspend interest rate hikes, it will be symbolic of the Fed's more than a year-long aggressive rate hike cycle, because the suspension is likely to mean that the Fed's monetary policy actions will shift from the "operating period" to the "evaluation period," and the market's future expectations of monetary policy is likely to shift from "suspension" to "stop."。

He also said there could be support for keeping rates at current levels at the June meeting.。He argued that such a decision would give Fed officials more time to assess the impact of past rate hikes and the inflation outlook.。

However, Kashkari stressed not to read too much into the June pause: "If we pause in June, it doesn't mean the tightening cycle is over, it means we are waiting to get more information.。He also said the possibility of another rate hike in July had not been ruled out.。

 

CICC: Fed hawks or "knocks" market expectations if the suspension of interest rate hikes will have global significance

 

According to CME Fed Watch, the probability of a Fed rate hike at its June policy meeting has now risen to 30.8%。As of May, the Fed has made ten rate hikes since March 2022, with a cumulative increase of a staggering 500 basis points.。

Zhang Wenlang, chief macro analyst at CICC Research, said that from the current data, it is not enough to conclude that the Fed will continue to raise interest rates in June。Zhang Wenlang pointed out that since the beginning of the year, the market's pricing of interest rates is always contrary to the Fed's guidance, which the Fed does not want to see, in view of this, Fed officials put the hawk more like a "knock" on the market's overly optimistic expectations of interest rate cuts.。

At 2 a.m. Beijing time on May 25, the Federal Reserve will release the minutes of the May meeting of the Federal Open Market Committee (FOMC).。It is reported that it was in the public statement of the meeting that the Fed removed the language that had previously hinted that it would raise interest rates in the future, and the market interpreted it as a signal that the Fed would suspend rate hikes in June.。However, since then, Fed officials have begun to hawk, all of a sudden let the market panic, making this "hint" has become somewhat elusive.。There is an urgent need for markets to find more evidence to support the certainty that the Fed is falling to either side of the dove eagle。

At present, many countries around the world are facing the problem of high inflation.。In the UK, economists predict that only by removing soaring energy prices from the annual calculation of inflation can its CPI annual rate fall below double digits;。

In this case, whoever takes the lead in sounding the clarion call to suspend interest rate hikes will attract the attention of other countries and carefully consider their own monetary policies。In other words, if the Fed does make a decision to suspend interest rate hikes in June, the decision will have global significance。

 

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