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Central bank may hold interim meeting as Fed readies rate hike

Central bank may hold interim meeting as Fed readies rate hike

2022-07-25

The Fed is preparing to raise interest rates this week, in a response to record-high inflation. Taiwan may follow suit and raise its own rates, but when and by how much will depend on U.S. action. One analyst says the board of directors of Taiwan’s central bank may hold an interim meeting if the U.S. raises its rates by 1 percentage point.

Impacted by world events, inflation in the U.S. reached 9.1% in June – a 41-year record high. The situation has people watching closely as the U.S. Federal Reserve readies a large rate hike.

Chang Chuan-yi
Taiwan Institute of Economic Research
If the U.S. raises rates by 1 percentage point, then we’ll have to watch what the central bank governor does. I think we can’t rule out the possibility that the board of directors will hold an interim meeting. As for whether a rate hike can curb inflation, actually the impact will be limited. There appears to be pent-up demand, but overly pent-up demand can affect economic growth.

If the U.S. raises rates by 1 percentage point, the analyst believes the board of directors may hold an interim meeting. However, the analyst advised the central bank governor to avoid raising Taiwan’s own interest rates too much. He said that in the face of inflation, a sharp correction in the financial market coupled with the impact of the COVID epidemic could further reduce consumer demand. Already, the Taiwan Institute of Economic Research has adjusted Taiwan’s projected annual GDP growth downward to 3.81%, and the CPI upward to 2.95%. A number of uncertainties remain for the second half of the year.

Gordon Sun
Taiwan Institute of Economic Research
The U.S. has about 50 days worth of reserves left, and if its reserves are increased, the price of oil will rise sharply again. The way things look at present, if the three major economies – the U.S., the EU and China – continue to decline throughout the second half of the year, then that decline will likely continue. However, you may have noticed that worldwide nobody is saying there will be a recession this year. Everyone is saying a recession will come next year. For example, the U.S. inverted interest rates recently, and interest rate inversion is not immediately followed by recession. You’ll have to wait until next year for that to happen.

Some have speculated that if the U.S. raises its interest rate by only 0.75 percentage points, then Taiwan’s central bank is likely to wait until September to follow suit. The rate hike in the U.S. will also affect currency exchange rates. However, the extent of its impact will depend on what the Fed does this week.

Fed本週若升息4碼 央行不排除召開臨時會

2022-07-25

美國6月份通膨率高於外界預期,創下41年來新高,眼看聯準會將在周四清晨升息,如果一口氣升息四碼,台灣央行不排除召開臨時理事會因應,不過學者提醒升息效果有限,一旦過頭,可能會打壓到經濟,而台經院對於台灣今年GDP的預估,已經下修到3.81%。

受到國際黑天鵝、灰犀牛肆虐,美國6月份通膨率高達9.1%,創下41年來新高,讓即將公布的聯準會升息結果,備受關注。

[[台經院院長 張傳一]]
“如果這次美國升息四碼,那就要看總裁,我覺得不排除會召開臨時理監事會議。那升息有沒有辦法打壓通膨,其實效果有限,似乎壓抑需求,但是需求壓抑過頭,可能會影響到經濟成長。”

專家預估,若聯準會升息四碼,央行不排除召開臨時會跟進,但學者也喊話央行總裁楊金龍,不要升息過頭,畢竟台灣面臨物價上漲,金融市場大幅修正,再加上本土疫情升溫等因素,民間消費表現比預期減弱,因此台經院下修今年GDP來到3.81%,甚至全年物價指數,則是上調到2.95%,下半年不確定因素仍多。

[[台經院景氣預測中心主任 孫明德]]
“美國的戰備庫存現在只剩下50天,如果未來提升它的戰備庫存,油價會再度大幅上漲。那目前看來,美歐中這三大經濟體,經濟下滑的情況到下半年,應該還會再持續下去,但是你會發現現在全世界倒沒有人說,今年會經濟衰退,大家覺得經濟衰退應該是明年的事情,包含最近各位看到的美國的利率倒掛,利率倒掛也不是馬上就要衰退,都要等到明年。”

外界評估,若美國聯準會只升3碼的話,台灣央行就可望撐到9月,再跟進升息,升一碼或半碼皆有可能,也牽動匯率市場邁向30,本周聯準會動向如何?都將牽動全球經濟體的敏感神經。

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