On June 28, local time, the European Central Bank's annual economic forum continued in Sintra, Portugal。At the day's policy panel discussion, the three-day economic forum reached its climax - the heads of central banks of Europe, the United States, the United Kingdom and Japan gathered to express their views on the current monetary policy of each country.。

            

Britain and the United States launched a "fight" over the rate of interest rate hikes, and the man finally let go.

        

Against the backdrop of repeated twists and turns in global inflation governance, "raising interest rates" has become a major issue for central banks in major developed economies.。At the seminar, Fed Chairman Jerome Powell and Bank of England Governor Andrew Bailey both reiterated the need to raise interest rates in the current economic situation, and surprisingly, even the Bank of Japan Governor Kazuo Ueda, who had previously pushed for easing, sent a weak hawkish signal.。

Powell bluntly said that the restrictive rate is not long enough。He added that not only is inflation still higher than expected, but economic data, including durable goods orders and consumer confidence, show the resilience of the U.S. economy.。More tightening is expected this year, not ruling out a rate hike at two consecutive meetings。

It is reported that by the end of this year, the Fed will hold four more meetings in July, September, November and December.。After a pause in June rate hikes, the Fed is widely expected to restart its rate hike process in July。If Powell's speech is followed, the Fed is likely to raise interest rates twice in July and September, each by 25 basis points, pushing the terminal rate ceiling to 5 during the year..75%。

Bailey expressed a different view on the strategy and effect of the rate hike。He said he thought a one-time rate hike of 50 basis points would be better than two consecutive rate hikes of 25 basis points each。He also stressed that while the UK's overall economy has shown resilience, just as resilient is inflation, so the Bank of England has decided that stronger action is needed.。

This sharp rate hike, Bailey is more than just talking.。Just this month, in response to an unexpected rise in inflation, the Bank of England has just moved the policy rate from 4.5% to 5%, a direct increase of 50 basis points, and announced that further monetary tightening will be needed in the future if there is evidence that inflationary pressures persist。

However, inflation governance in the UK and the US cannot be generalized。For the United States, the current overall CPI data from the peak of a year ago has been cut, the Federal Reserve can also gradually take a more moderate approach to ensure a soft landing of the U.S. economy; for the United Kingdom, after a long period of monetary tightening, the British consumer price index in May is still at 8.7%, core inflation has also risen, and without aggressive policy, I'm afraid the previous 12 consecutive rate hikes will be wasted.。

The Bank of Japan, I do not know whether the hawkish speech, the market is finally looking forward to Ueda and the possibility of a shift on the issue of ultra-loose monetary policy。Ueda acknowledged that wage and price growth in Japan is picking up after decades of near-stagnation, prompting officials to consider the possibility of abandoning ultra-loose monetary policy.。

He said: "If we have reason to be confident that (a pick-up in inflation in 2024) will happen, that would be a good reason to change policy.。"

           

Home battle Lagarde "carries Eagle to the end"

          

As the meeting is hosted by Portugal in the euro zone, the home appearance of the European Central Bank President Lagarde (Christine Lagarde) is particularly interesting.。On June 27, the former Managing Director of the International Monetary Fund (IMF) already said at the forum: "Unless there are major changes, we will continue to raise interest rates in July."。

Lagarde said that inflation in the euro area has entered the so-called "second stage," this wave of inflation driven by rising wages has changed the nature of inflation, inflation will be more lasting and difficult, the European Central Bank needs to develop appropriate monetary policy to deal with the current inflation situation.。She also said that although some inflation indicators in the euro area have shown signs of slowing down, inflationary pressures are still high, and in the face of more persistent inflation, the ECB is unlikely to confidently announce that interest rates have peaked in the near future.。

Ms Lagarde continued her hawkish rhetoric during a policy panel discussion yesterday。First, she stressed that it would not consider adjusting its inflation target in the current situation and that, like continued inflation, the bank would "continue to act" until the established inflation target was reached.。Subsequently, she again responded to the ECB's monetary policy path, saying that "the suspension of interest rate hikes is not its current consideration."。

In fact, Lagarde's comments were largely consistent with those of her colleagues.。On Tuesday, the European Central Bank's chief economist, Philip Lane, also said that the euro zone is not expected to experience a rapid rate cut in the next few years.。He noted that while the eurozone is likely to be able to reduce inflation in the second half of this year, it is estimated that inflation levels in the region will be difficult to pull down to 2 per cent for several years.。

According to Eurostat data, the overall inflation rate in the euro area in May this year was 6.1%, the European Central Bank has raised interest rates eight times in a row, a total of 400 basis points, raising the key deposit rate to 3.5%, the highest value in 22 years。

While the determination to combat inflation is commendable, the ECB's continued rate hikes have caused some discontent。On June 28, local time, Italian Prime Minister Giorgia Meloni said in parliament that the ECB was wrong to deal with inflation by simply raising interest rates and that its negative effects would outweigh the impact of inflation.。

According to the recently released S & P Global Composite Purchasing Managers Index, economic activity in the euro zone fell to a five-month low in June, hit hard by the decline in industrial production.。In addition, growth in the euro zone's services sector has stalled in recent times, and some economists have warned of the possibility of a recession.。

Meloni said: "It is right to fight inflation decisively, but the simple rate hike package adopted by the ECB is not the right path for many people.。Price increases are not the result of excessive economic growth, but of a variety of endogenous factors, most notably the energy crisis triggered by the Ukraine crisis.。We cannot fail to consider the risk that constant rate hikes are a more harmful treatment than the disease itself。"

           

Dahua: If clear breakthrough 1.1010 points in Europe and the United States will start to continue to rise。

           

As of press time, the euro rose slightly against the dollar on the day..0467%, now trading at 1.0918; Euro slightly down 0 against RMB on day.0063%, now 7.9042; EUR / HK $up 0 on day.0799%, reported 8.5541。

 

For the future of the euro, UOB said it did not expect the euro to rise sharply during the day, hitting a high of 1.0976。The upward momentum in Europe and the United States has improved, but not much。While there is room for the euro to rise further, it is highly unlikely to hit last week's high of 1.Near 1010。If the euro falls below 1.0915, will indicate that the current upward pressure has subsided。

The bank also said that after the euro fell sharply last Friday, the bank had already said on Monday that "Europe and the United States may see declines, but it is not likely to fall below 1.0840 and 1.0805 strong support level。On June 27, the euro surged to a high of 1..0976, Breakthrough 1.0970 "strong resistance" level, indicating that the downward trend has subsided, the current volatility may be in consolidation.。As a result, the euro is expected to trade at 1.0895 and 1.1010 Interval。Looking ahead to the market, if the euro clearly breaks through 1.1010 points, which will indicate that a sustained rise will be opened。