On September 12, 2022, the Asia-Pacific foreign exchange market was in turmoil, and almost all major currencies in the Asia-Pacific region fell against the US dollar. Among them, the yen fell by more than 5400 points again, and the dollar reached the level of 143 against the yen, which was closer to the warning line of 145. What is even more surprising is that the turmoil in Asia-Pacific currencies is not caused by the US dollar index. The US dollar index fell from a high point of 1 10 to 108. On the contrary, the euro strengthened. At the monetary policy meeting on September 8, 2022, the European Central Bank raised all three key interest rates in the euro zone by 75 basis points, and indicated that it might continue to raise interest rates to further curb inflation.

Although the comments of Fed officials reinforced the expectation of another sharp interest rate hike at the meeting on interest rates in September, the pricing of monetary policy is nearing completion. As investors wait for next week's key inflation data to get more clues about the pace of the Fed's interest rate hike, the undercurrent of the derivatives market may see a new balance between bulls and bears, but the risk of volatility may continue until the meeting. As the Fed continues to express its determination to fight inflation, the expectation of radical policies has pushed up the yields of the US dollar and US Treasury bonds. The longer inflation is above the target, the greater the risk that the public will accept normal inflation. He reiterated that the Fed is firmly committed to controlling prices, and hopes will not arise? The social cost is very high? In the case of doing so.

The Fed's policy measures are expected to bring some pains to the economy, but this road will continue until inflation is controlled. Although financial markets frequently re-price the Fed's policies, the data to be released just confirms that the Fed's policies are on the right track. The Federal Open Market Committee (fomc) will raise the fund interest rate by 75 basis points at its September meeting, and raise it by another 75 basis points before the end of 2022. High-frequency data shows that the US supply chain is improving. At the same time, the slowdown in demand under economic pressure will help ease the price pressure, but inflation will not return to normal level soon. Schwartz predicted that the price risk will last at least until 2023.

As the gasoline price continues to be depressed, and the Purchasing Managers Index (pmi) survey shows that the sales price growth rate has further slowed down, it is expected to fall back from last month. The price drop is welcome, but it is not enough to let the Fed relax its vigilance. Lyle, vice chairman of the Federal Reserve? Brainerd said recently that it was necessary? A few months? We can set the target that the inflation rate is falling to 2%.