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Daily Outlook: Former U.S. Treasury Secretary ​urged the Fed to start raising interest rates ASAP after the New Year


The dust settled at the top of the Fed, and Biden nominated two popular candidates as chairman and vice chairman respectively:

Faced with the highest inflation in decades and the lingering impact of the epidemic, US President Joe Biden decided to maintain the continuity of central bank policy, choosing Jerome Powell to continue as the chairman of the Federal Reserve, and at the same time promoting director Lyle Brainard to deputy Chairman. The decision announced by the White House on Monday is both a commendation for Powell’s assistance in saving the U.S. economy from the epidemic, and it also entrusts him with the important task of protecting the recovery from the impact of soaring consumer prices. As a Republican, Powell is expected to be successfully confirmed in the Senate. He was supported by a vote of 84 to 13 for his first four-year term. Later, he also worked hard to win the support of lawmakers.


The United States is expected to announce that it will join with China and others to release oil reserves, and OPEC+ warns that it will reassess its production increase plan:

OPEC+ officials warned that they may respond to the release of oil reserves by the world's major oil consumers, and a struggle for control of the global energy market is about to kick off. Insiders revealed that Biden is expected to announce on Tuesday that it plans to release strategic oil reserves with China, India, Japan, and South Korea. This action, which has been brewing for several weeks, aims to ease the pressure of rising oil prices this year. OPEC+ representatives said that the current market conditions do not support major consumer countries to put in millions of barrels of oil reserves, and OPEC+ may have to reconsider its plan to increase oil production when it meets next week.


Merkel said that Germany’s latest epidemic is “worse than what we have experienced”:

German Chancellor Angela Merkel stated that the latest round of the epidemic caused by the Covid-19 virus is worse than what Germany has experienced so far, and called for more restrictive measures to curb the spread of the virus. According to a person familiar with the matter, Merkel told CDU officials on Monday that the situation is very serious and warned that unless the fourth round of the epidemic can be resolved, the hospital will soon be overwhelmed. She said that many people do not seem to understand the seriousness of the situation, more people should be vaccinated, and this alone is not enough. She called on Germany's 16 states--all states to realize their own anti-epidemic policies--to tighten anti-epidemic restrictions.


The EU plans to revise non-essential travel regulations and discuss the new crown vaccine booster and the validity period of the vaccination certificate:

As EU countries have adopted various response measures to combat the latest round of the epidemic, the EU will discuss how to update its Covid-19 vaccination digital certificate and how to manage travel within and outside the EU. "We need to avoid fragmentation," EU Health Commissioner Stella Kyriakides told the European Parliament on Monday. She emphasized that the European Union’s Covid-19 certificate has always been a “meeting point” for coordinated actions across the European Union.


ECB officials issued a hawkish signal, saying they were "serious" about ending the emergency bond purchase program:

Francois Villeroy de Galhau, a member of the European Central Bank Management Committee, said that the European Central Bank is "serious" about ending its emergency bond purchase program in March next year and may not need to expand its conventional asset purchase program to make up for the shortage. The reluctance of the Bank of France governor towards more stimulus measures coincides with rising inflation. At the same time, the re-heating of the new crown epidemic has also cast a shadow over the economic prospects of Europe. Villeroy said that although health is the top priority, the losses caused by each wave of epidemics are less than the last time, and the high vaccination rate in continental Europe will prove to be an “economic advantage”.


Former U.S. Treasury Secretary urged the Fed to start raising interest rates ASAP after the New Year:

Former US Treasury Secretary Larry Summers stated that in order to prevent inflation from getting out of control, the Fed should put the brakes on economic stimulus measures earlier than expected and start raising interest rates in early 2022. "I will hope to complete the entire code reduction in about three months, and if the situation continues, I will look forward to a very realistic possibility of raising interest rates not too long after the New Year," Summers said Bloomberg TV said in an interview with David Westin. The Harvard economist also said that if it were him, the purchase of mortgage-backed securities would be ended "almost immediately" because the plan caused inflation in the real estate market.


U.S. second-hand housing sales unexpectedly increased in October, reaching a nine-month high:

Second-hand housing sales in the United States unexpectedly increased to the highest level since the beginning of the year in October, indicating healthy demand, as more buyers are taking advantage of strong job growth and low mortgage interest rates. According to data released by the National Association of Realtors (NAR) on Monday, second-hand housing sales rose 0.8% to 6.34 million units in October. The median estimate of economists surveyed by Bloomberg is 6.2 million sets.

Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.

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