Four Major Events Of The Fed This Year And Three Major Challenges Next Year

U.S.A federal reserve The Committee concluded its final interest conference this year on the 13 th. Although the new monetary policy has not been launched after the conference, it announced that it would continue the previous ultra loose monetary policy. Such a policy choice is due to the cautious attitude of the Federal Reserve to the current economic trend, as well as the high-level policy choices of the Federal Reserve. divergence Larger.

　　 Internal and external pressure

The less than 500 word statement issued after the conference on interest rates was slightly more optimistic than the previous meeting in November, but worries about the internal and external pressures of the US economy did not diminish.

For the domestic economic situation, the statement pointed out that the US economy has been showing a slow expansion in the near future. It is expected that the economy will continue to grow slowly in the next few quarters. The consumption of the residents will continue to warm up and the employment market will also improve in recent years. However, the unemployment rate in the United States remains high, the capacity utilization rate is not high, the growth rate of fixed assets investment is slowing down, and the real estate market is still in the doldrums.

In the second half of this year, the US economy showed signs of increasing speed, and the US economy grew by 2% in the three quarter, which was better than the 0.4% and 1.3% of the first two quarters, thanks to the combined effects of falling oil prices, automobile industry supply chain recovery and consumer confidence. But the recent European debt crisis that has continued to ferment has also made the market worry that the US economy will be under pressure next year because of the risk of export decline and international capital market volatility.

The wording of the Fed's latest statement, which has always been obscure, did not mention the word "euro zone" or "European debt crisis", but the two time mentioned the potential impact of the global economic slowdown on the US economy. The statement said: "the global economy is showing signs of slowing down". The pressure of global financial markets has brought severe challenges to the US economic outlook.

　　 Four major events this year

December 13th coincides with the birthday of Federal Reserve Chairman Bernanke. This year, Bernanke, who is nearly a year old, is a challenging and stress year. Under the background of limited policy operation space, the Fed still has four major tasks to fulfill its dual mission of promoting employment and stabilizing inflation.

First, end up for QE2. In view of the limited effect of quantitative easing monetary policy (QE) on stimulating the recovery of the US real economy and the tremendous criticism at home and abroad, the Federal Reserve announced in June that it will end the 600 billion dollar and second round of quantitative easing monetary policy launched in November last year.

Pedersen Moussa, a senior research fellow at the Institute of international economics and chief economist of the former International Monetary Fund (micro-blog), believes that in addition to the capital market, the stimulus effect of QE2 on the real economy of the United States is not ideal. Whether the introduction of the new QE policy has aroused heated debates at the top of the Federal Reserve is also an important reason for the short term of QE3 in the short term. {page_break}

Second, clear the implementation of ultra low interest rate policy. The Federal Reserve announced in December 2008 that it would reduce the federal funds rate to zero to 0.25%. With interest rates no longer falling, the Fed announced in August this year that the ultra-low interest rate would remain at least until the middle of 2013.

Before that, how long will the price monetary policy tool last, the Fed will always adopt vague terms like "going on for a while". But the Federal Reserve for the first time in August explicitly implemented the deadline, through the transmission of a clear signal to the market to enhance the effectiveness of the policy.

Third, start the press conference system. As another important measure to enhance transparency and enhance communication with the market, Bernanke announced in April this year that the quarterly conference will be institutionalized. The Federal Reserve's major innovative initiatives in the past century have won market recognition.

Fourth, carry out the directional adjustment operation of the balance sheet. Against the backdrop of the new QE policy, the Fed announced in September that it would "sell short and buy long" in its balance sheet, that is, the sale of short and medium term treasury bonds and the purchase of long-term treasury bonds to further lower the medium and long-term interest rates.

　 Next year's "three big" difficult problem "

Next year, under the leadership of the Fed, Bernanke should deal with at least three major problems. First, how to further improve the effectiveness of monetary policy instruments. For the Fed, under normal circumstances, there are only two weapons to be used next year, that is, the rate of interest reduction and the introduction of QE3.

Robert laurel, the Nobel Laureate in economics, told reporters that American companies are sitting on trillions of dollars in cash just because they are short of investment opportunities and unwilling to invest heavily. So lowering the reserve ratio may not help stimulate credit and the real economy.

For the QE3, the latest research report of the Standard Chartered Bank predicts that the European economy will start a mild recession this winter, while the US economic growth momentum will also decline in the first half of next year, so the Federal Reserve may launch QE3 in the first half of next year.

Second, the long term ultra loose monetary policy will lay hidden dangers for future inflation pressures. In response, the Fed said in a statement the same day that it will closely monitor changes in US inflation and inflation expectations.

Third, for the future policy choices, the Fed's top leaders are divided. How to coordinate internal differences is another difficult problem before Bernanke. At the 13 day interest conference, Charles Evans, President of the Federal Reserve Bank of Chicago, voted against the resolution again. Evans and other open market committee opposed the idea of "omission". We should launch more monetary policies to stimulate the US economy as soon as possible. While Richard, Fisher, President of the Federal Reserve Bank of Dallas, emphasized more anti inflation and opposed continuing to stimulate the economy.