September 2023 FOMC Debrief

Hello my friends, today is the September FOMC meeting and as usual I'm going to debrief you as to what happened and what my thoughts are.

大家好，今天是九月份的FOMC会议，跟往常一样，我将向大家汇报会议的进展以及我的想法。

Now before we begin let's level set. The last FOMC meeting we had was in July where the FIT HITE rates. Now heading into this meeting we've had some pretty positive data. On the inflation front we've had pretty good inflation prints. The last month's inflation print seems just some acceleration due to energy prices but overall I think inflation has been trending in the right direction. At the same time economic growth has been surprising to the upside. Consumer spending continues to be strong and economic continues to print jobs. Of course not at the same pace as it used to but that's to be expected as we approach full employment.

现在在我们开始之前，让我们一起确认一下现状。我们上一次的FOMC会议是在7月份，那时它决定调整了FIT HITE利率。现在进入这次会议之前，我们有一些非常积极的数据。在通胀方面，我们有相当不错的通胀数据。上个月的通胀数据似乎是由能源价格的上涨引起的一些加速，但总体来说，我认为通胀趋势是正确的。与此同时，经济增长出乎意料地好。消费者支出仍然强劲，经济仍然在增加就业。当然，并不像过去的那样快，但这是可以预期的，因为我们接近充分就业。

Now heading into this meeting now the FOMC had already very clearly hinted that they're not going to HITE rates. So that was not expected. What people were trying to figure out though is what kind of future path they would signal. Now this being a September FOMC would be an FOMC where the FIT has a new DOT plot. The DOT plot is basically a document where all the FOMC participants tend to learn where they think interest rates will be over the next two years as well as their view on growth and inflation. It's a way that the FOMC communicates to everyone just what they're thinking. So we pay attention to what the median FOMC participant is saying because at the moment that's likely going to be what the FIT does. Now to be perfectly clear events happen the state changes its mind and in the past the DOT plot has been very wrong. But of course it's the best information that we can have at the time and unless you have big changes in the world it's the best that we have and it's also I think been much more right than the market has been over the past several months.

现在进入这次会议之前，FOMC已经非常明确地暗示他们不会提高利率。所以这是意料之外的。然而，人们试图弄清楚的是他们会发出何种未来路径信号。由于这是九月的FOMC会议，会有一份新的点阵图（DOT plot）出现。点阵图实际上是一份文件，其中包含所有FOMC参与者对未来两年利率走势、经济增长和通胀的看法。这是FOMC向所有人传达他们的思考方式的一种方式。因此，我们关注的是中位数FOMC参与者的发言，因为目前这很可能代表了FOMC的决策。现在很明确，事情是会发生变化的，政府会改变主意，过去的点阵图也经常错。但当然，这是我们在当时所能得到的最好信息，除非世界发生重大变化，它也是我认为在过去几个月中比市场更加准确的信息。

Okay so this September FOMC meeting again as expected the FIT did not hike rates but in my view it was surprisingly hawkish. Now it was hawkish through the path of rates of the DOT plot communicated. Now first of all the FIT is still sticking towards the guidance that it gave at its last DOT plot which was in June where they forecasted two more hikes since June and we had one so it would be one more this year. Now the September DOT plot continues to pencil in one more rate hike by the end of the year which could happen in November or December. The market is pricing it pretty good probabilities of it happening but we'll see.

好的，所以这次的9月FOMC会议再次符合预期，FIT没有加息，但在我看来，它出人意料地持鹰派立场。具体表现在DOT图中的利率路径上。首先，FIT仍然坚持其在上一次DOT图中给出的指导，即自六月以来的两次加息预测，我们已经有了一次，所以今年还有一次。现在，9月的DOT图继续在年底之前标记了一次加息，可能在11月或12月进行。市场对此的可能性定价相当高，但我们还要看。

Now the other thing that I would note about this DOT plot was that it revised upwards economic growth significantly for this year. In June the FOMC was penciling in economic growth this year to be about 1%. Now from their perspective trend growth potential growth of the US economy is about 1.8% so 1% would be a pretty slow economy it knew was designed to get inflation back towards target. However what we've seen this past year is that economic growth has been really strong so the first quarter growth has been above 2% second quarter also above 2% now keep in mind 2% is above the potential growth rate of the economy of 1.8% so according to traditional economic theory when you're growing above trend there's an inflationary impact. Now we don't have data for this quarter yet but it looks like it's going to be pretty solid.

现在关于这个点状图的另一件事情是，它将今年的经济增长大幅上调了。在6月份，FOMC预计今年的经济增长约为1%。从他们的角度来看，美国经济的趋势增长潜力约为1.8%，因此1%的经济增长速度相当缓慢，旨在将通胀推向目标。然而，我们在过去的一年中看到的是经济增长非常强劲，第一季度增长超过2%，第二季度也超过2%。现在要记住，2%超过了1.8%的经济潜力增长率，因此根据传统经济理论，在超过趋势增长时会产生通胀影响。现在我们还没有本季度的数据，但看起来它将会相当稳健。

Now taking looking at all this recent data the Fed upgraded its growth forecast for this year from 1% to 2% it was a very big upgrade. Now if you're the Fed and you're looking at things as they evolve you have to you have to begin to be afraid that you know maybe the economy is going to persist thing around hot and that makes it more difficult for us to get inflation back under control. So in line with that upgrade in growth forecasts the Fed also penciled in fewer rate cuts for next year. In fact it guided towards a rate path next year that had two fewer hikes. So in my view that that is a significant change in the stance of policy so the Fed was thinking maybe we'd have 100 basis points of cuts next year now the Fed is thinking maybe we'll only have 50 basis points worth of cuts and not surprise and the market saw this meaningful revision upward in the expected path of policy and it's sold off bigly. So we have the dollar strengthening again higher US rates stronger dollar not rocket science we have tech selling off and I think treasury yields they were heading into that homesay they were lower and they gave a lot of that back after the press conference.

现在，根据最近的数据来看，美联储将今年的经济增长预测从1%上调至2%，这是一个非常大的升级。如果你是美联储，并且对事态的发展进行观察，你必须开始担心经济可能会持续热络，这会使我们更难控制通胀。因此，根据经济增长预测的提升，美联储还预期明年的利率降息将会减少。事实上，它指导到明年的利率路径比原先预计少调整了两次。在我看来，这是政策立场的重大变化，因为美联储原本认为明年可能会进行100个基点的降息，现在他们认为可能只会进行50个基点的降息，这让市场感到意外，并出现大幅抛售。所以我们看到美元再度走强，美国利率升高，美元升值，这并不是什么复杂的道理。科技股出现抛售，我认为国债收益率在新闻发布会后回调了很多。

So this market reaction is totally in line with what you would expect from a hawkish Fed. Now the last thing that I'll note that I found interesting was the feds the F1T community's view of what our star is. Now our star in economics jargon is the interest rate where neither where the economy is neither growing nor shrinking. It's a benchmark rate the Fed uses to try to decide whether or not policy is a combinator or restrictive.

这种市场反应与鹰派美联储的预期完全一致。现在我想指出有趣的一点是，美联储F1T社区对我们的引导利率的看法。在经济学术语中，我们的引导利率是指经济既不增长也不萎缩的利率水平。这是美联储用来决定政策是拮抗还是制紧的基准利率。

So if policy is above our star that means the Fed is slowing the economy down and if policy is below our star that means the Fed is being a combinator and trying to boost the economy. So there's been a lot of discussion over the past few months as to whether or not our star has changed. The Fed over the past few years has basically agreed that our star is about 0.5% in real terms. But you know more and more people on the F1T the federal open markets community are waking up to the fact that that's probably not true.

如果政策高于我们的基准（点），这意味着美联储正在减缓经济增长；而如果政策低于我们的基准（点），这意味着美联储正在采取组合政策试图促进经济增长。因此，过去几个月关于我们的基准是否发生变化的讨论越来越多。在过去几年中，美联储基本上同意我们的基准在实际的通胀调整后约为0.5％。但是你知道，越来越多的联邦公开市场委员会的人正在意识到这可能不正确。

Why? Well obviously the Fed hydrates to over 5% and yet the economy is still strong. Unemployment is low and DDB growth is above trend. So it seems you know if you're open-minded you have to come to see that maybe something is different in the economy. Maybe the economy is less interest rate sensitive than expected. And you can see this in the distribution of our star among F1T participants. Now the median estimate of where our star is is still 0.5% in real terms but you can see from the stoplight that their distribution is winding towards the upside.

为什么呢？显然，尽管联邦储备局的利率上升到了5%以上，但经济依然强劲。失业率低，GDP增长超过趋势。所以，如果你持开放态度，你就会发现经济中可能有一些不同的地方。也许经济对利率的敏感性低于预期。你可以从F1T参与者的分布中看出这一点。现在，关于我们的明星在实际利率下的中值估计仍然为0.5%，但你可以从这个示意图中看到，它们的分布正在向上走。

So more and more people on the F1T are beginning to think that you know maybe that something in the world is different and so interest rates going forward in the future are going to be structurally higher. They're coming, they're becoming aware of the fact that that era of low interest rates that we had in the past where people can get now 2.5% mortgages that's over and going forward maybe we're going to head towards a world where interest rates will be structurally higher.

所以越来越多F1T上的人开始认为，也许世界上的某些事情与以往不同，因此未来的利率可能会结构性地上升。他们开始意识到，过去的低利率时代已经结束了，人们不能再获得2.5%的抵押贷款，而且未来可能会进入一个利率结构性上升的世界。

And again if you listen to, if you follow my programming then you know that that's what I've been saying for some time. The bond bull market is over, totally over and going forward. We're basically very likely in my view to have structurally higher interest rates. The market I think is beginning to realize that we see that today and I think through the dot plots we also see that the set is beginning to realize that as well.

如果你再次倾听，如果你遵循我的规划，那么你会知道我一直以来都在说这点。债券牛市已经结束，完全结束了，未来我们极有可能迎来结构性较高的利率。市场正在开始意识到这一点，而且我认为通过点图我们也能看到，现在决策者也开始意识到这一点。

And yeah nothing too much happened during the press conference, nothing really to write home about. So I think that's all I'll talk about and I'll see you back here on Saturday where I have my weekly markets briefing. Talk to you guys later.

是的，在新闻发布会期间几乎没有什么特别的事情发生，没有什么值得一提的。所以我想这就是我要讲的全部内容了，下周六我会在这里举行每周市场简报。稍后再与大家交流。