The Fed's last monetary policy meeting of the year has attracted a lot of attention. The upper limit of the interest rate resolution will be released at 3:00 Beijing time on Thursday, and Federal Reserve Chairman Powell will hold a press conference at 3:30.

The market is expected to focus on the following three highlights.

1. Taper may accelerate

Federal Reserve Chairman Powell has previously said that Fed policy makers will discuss in December whether to end their monthly bond purchases of $120 billion a month a few months earlier than expected. The Fed began to scale back its asset purchases in November and plans to end them altogether by mid-2022.

The chief economist of ING expects the Fed to announce an accelerated reduction in bond purchases by a further $30 billion (to $60 billion) in January, a further $30 billion in February, and stop buying after March.

Many institutions believe that the Fed will accelerate taper at this meeting, which is widely expected to be completed in March next year to help clear the way for interest rate hikes in 2022.

2. the time point of interest rate increase is not clear for the time being, so continue to pay attention to the bitmap.

The Fed bitmap also showed in March that it was unlikely to raise interest rates before 2024, moved forward to 2023 after the June update, and the September bitmap showed the median rate hike in 2022. At present, it is generally believed that interest rates will be raised in 2022, but the timing and frequency of interest rate increases are not quite the same.

The head of the Brown Advisory's fixed-income department expects the Fed to raise interest rates next year as early as April.

Analysts in China and Thailand point out that the probability of the Fed raising interest rates in June is now expected to exceed 70%.

UBS expects to advance its first rate hike to September next year, and then raise it every other quarter, in short: ending Taper in March, shrinking the table in June and raising rates in September.

Morgan Stanley believes that it is possible to raise interest rates twice in 2022, 3.5 times in 2023 and three times in 2024.

Goldman Sachs Group believes that the Fed is likely to raise interest rates once in May, July and November next year, and twice in 2023 and 2024. Another possibility is that interest rates will be raised twice in 2022, three times in 2023, and four times in 2024, a total of nine times.

Some institutional personages believe that the number of interest rate increases more than 2 times next year means that the Fed's attitude is hawkish, which may affect the mood of the US stock market. A head of strategy at Citi said the prospect of Fed tightening was likely to push up market volatility.

However, CICC summed up the historical trend and predicted that during the QE reduction phase, the US dollar as a whole was strong, while US stocks still performed well; emerging companies were relatively backward; and crude oil, industrial metals and agricultural products performed worst.

Market forecasts for the timing of interest rate hikes often combine the economic situation, speeches of Fed officials and bitmap, which may be one of the most closely watched scatter maps in global financial markets.

[read the dot matrix diagram]

The meaning of the bitmap: the statistics of Fed officials' forecasts for interest rates are shown as scatter charts.

The original intention of the release: to let the market know what is going on inside the Fed.

Release time: usually atThe last month of each quarterPublished in monetary policy documents (i.e. March, June, September and December each year).

For example, the dot map of the Federal Reserve in September looks like this:

Each dot corresponds to the estimate of one Fed official, and up to 19 monetary policy makers are involved in marking the median estimate (seven Fed governors in Washington and the presidents of 12 Federal Reserve banks).

weInvestors should pay special attention to the median of these points, followed by the concentration of these points.

For example, if the current interest rate is 0% Mel 0.25%, then everyone thinks that it will remain at this level in 2021, while half of the dots in 2022 will be at 0.25% Rue 0.75%, which means that interest rates may be raised once or twice, but half of the officials think that the level will remain unchanged. Therefore, the consensus is not as obvious as in 2023. Most officials believe that interest rates will change in 2023, and nine officials think that interest rates will be raised to more than 1%, that is, interest rates will be raised for about three times.

Investors must pay attention to the fact that the bitmap is just a point of view.It does not represent the real policy direction.On the one hand, not all forecasters have the final say on interest rates; on the other hand, historically, the bitmap is not consistent with real policy.

3. Pay attention to Powell's position

As mentioned above, the bitmap and the market will continue to look for clues of future trends in the speeches of "Master Bao," who loves to "play tai chi", and whether he will express his views on recent data such as inflation and unemployment.

El-Erian, Allianz's chief economic adviser, has criticized the Fed many times this year and recently said: "the interim may be the worst inflation forecast in the Fed's history!" In addition, Morgan Stanley also expects the Fed to take a hawkish position, emphasizing the continuing risks of inflation and no longer treating high inflation as "temporary".