关于美联储 9 月降息！必须注意这些微小变化的字眼

In September 2021, after three consecutive months of inflation exceeding twice the Federal Reserve's 2% target, Federal Reserve staff and policymakers changed their description of inflation to "persistently high".

Following the Personal Consumption Expenditures (PCE) price index used by the Federal Reserve to set inflation targets exceeding 4% in May, June, and July of that year, the "persistently high" description has been retained in the policy statements of the Federal Open Market Committee (FOMC) responsible for setting interest rates, even though the PCE price index has now fallen to 2.6% and appears to still be declining.

The Federal Reserve's policy meeting next week may ultimately remove this phrase from the policy statement. If so, it would be the strongest signal of the Federal Reserve's plan to cut rates in September and begin the easing phase of its monetary policy cycle, with investors now seeing a September rate cut as almost certain.

Downgrading the description of inflation to a milder term than "persistently high" may also lead the Federal Reserve to modify another key sentence in its current policy statement, which states that they will not cut rates until officials "have more confidence that inflation is on track to reach 2%".

Federal Reserve staff stopped describing inflation as "persistently high" after the PCE price index fell below 3% in January of this year, and policymakers noted before the meeting on July 30-31 that inflation was slowing across the economy, expressing more confidence that this slowdown would continue.

They began using phrases like "getting closer" to describe how far away the policy shift is, hinting at some circumstances that could lead the Federal Reserve to change its view of the economy and its policy response.

Atlanta Fed President Bostic commented to reporters at the end of June that he would be "surprised" if any inflation data exceeding 0.5 percentage points was not considered high, indirectly suggesting that a 2.5% or lower inflation rate is a benchmark that could at least be considered for changing the inflation description.

Many economists believe that this threshold will be reached or exceeded when the PCE data for June is released on July 26.

Richmond Fed President Barkin told reporters last week that the opening sentence of the policy statement, including descriptions of growth, the job market, and inflation, is used to "assess the economy". With new PCE data released before the meeting, "we will see what that number is and make the necessary adjustments".

Appropriate language guidance is crucial

Some economists believe the change is reasonable.

"They should be more proactive in acknowledging that inflation has cooled," said Neil Dutta, head of Renaissance Macro Research, who pointed out in a recent analysis that the inflation concerns troubling Federal Reserve officials now seem to be moving in their favor.

For example, the Bureau of Labor Statistics developed a new housing inflation measure, showing that rents slowed significantly throughout the second quarter, a measure that reflects housing inflation trends faster than the CPI index Dutta added, "Housing rent inflation is further slowing down."

Recent minutes from the Federal Reserve meeting show a change in the description of inflation by Fed officials.

At the meeting in December last year, with data showing an inflation rate of 3%, Fed officials stated that inflation "eased over the past year but remained elevated."

However, at the following month's meeting, with the December PCE price index falling to 2.6%, the description of "elevated" was modified in the report, with officials only stating that inflation remained "above 2% after a significant decline throughout the year."

Comments from officials on the economy usually do not attract much attention as the Fed's deep team of economists are not the decision-makers, but their opinions do influence discussions, and changes in tone may provide signals on the direction of Fed policy.

As inflation accelerated in 2021, Fed officials and policymakers first acknowledged that inflation "had risen," a term used in the Fed's policy statements in April, June, and July of that year.

In February 2021, the PCE price index was only 1.8%, but rose to 2.7% in March. When the Fed held its meeting in April that year, this data had not actually been released, but economists could closely estimate it based on other data.

Officials described inflation as "elevated" in September 2021, and so did the policy statement.

Inflation at the Fed continued to rise, reaching a peak of 7.1% in June 2022. Subsequently, the inflation rate sharply declined and the slowdown became more widespread.

Commodity prices have been falling, a reliable "drag" on inflation in the past decade before the COVID-19 pandemic, at least for now. Wages are falling, and the rise in "sticky" service prices is also declining.

New York Fed President Williams said in an interview last week that the U.S. is "getting closer and closer to the inflation trend we are looking for."

Omair Sharif, head of inflation insights and a keen observer of price trends, said the evidence seems clear. Sharif pointed out that excluding the seemingly noisy high inflation at the beginning of 2024, the core inflation rate has averaged the Fed's 2% target for 10 out of the past 13 months. Sharif said:

"I'm looking at this from the perspective of last summer, where core inflation rates excluding volatile food and energy prices began to decline. In this context, removing the reference to 'elevated' inflation is not only reasonable but may be a good way to signal at the July meeting that a first rate cut in September is indeed possible."