The federal reserve to raise interest rates turn a new
page of our history
The market is always fickle.Although from every point of view, the market of every change is excusable, but in the long run, the market change frequently and are lost in the short-term.In terms of the federal reserve to raise interest rates, even if there is no become a reality, but in the past three months, the market's expectations of its has experienced the ups and downs like a roller coaster.September, October and December, the federal reserve have a policy-setting meeting, each 811 yuan reform, the market once thought nailing on September rate board;After 811 one-time devaluation of RMB exchange rate, the market's expectations of the federal reserve act immediately sharp cooling;Formally in September and raise interest rates after the abortion, the market has to raise interest rates for the first time after the estimated time for release to the March 2016;Then again, meeting in October, the federal reserve released hawkish rhetoric, the futures market hidden interest rates expected in December and jumped from a low of 30% to 70% above;Up to December 17th, the federal reserve to raise interest rates to the facts.
Not air, is not a discussion, but move.Just three months time, the economic fundamentals will not change dramatically, so the rate hike and reflect is a short-sighted and impetuous market in panic
atmosphere.Indeed, over the past three months, so many influential happening in the world, competitive devaluations hubbub, financial market volatility, commodity slide show, suddenly and violently attack shocked the world.In my opinion, these incidents increased the uncertainty of the market, but did not change the direction of economic trends and policy itself.
Choice, in a loose monetary policy, does not depend on the uncertainty, and depends on the output gap (the actual growth is lower than the potential growth levels).From the point of theory and reality, loose monetary policy can produce two kinds of effects, one is the inflation effect, the second is the growth effect.Only in the presence of the output gap, easing is growth effect, if the output gap, loose monetary policy will only bring inflation effect.Maintaining price stability is the primary goal of the central bank, unless you are the real economy serious deflation, under normal circumstances, monetary policy should be as the output gap narrowed and relieve efforts until eventually turned to thoroughly.Is, to emphasize the important difference between the United States and other major economies just lies in the fact that the United States and the output gap is shrinking gradually disappear, according to the IMF forecasts that in 2016, the output gap in the United States would decrease in the seventh year in a row, and less than 1% for the first time, and will disappear in 2017.Considering the monetary policy still have six
months to a year or so of time lag, the United States continues to maintain loose monetary policies do more harm than good.The federal reserve to raise interest rates, therefore, has been a certain event, uncertainty change point choice only briefly, necessity itself does not change.
Based on the output gap, policy time lag judgment and choice of the optimal currency reality, the author has always believed that the so-called market of a new round of global monetary tide is a false proposition, the United States will not have QE4, Europe, Japan or China's loose monetary policy orientation will not affect the fed in the direction of choice.The U.S. economy in September rates have already reached the threshold and is bound to do won't wait too long, in September after the cancellation, wait in October, to raise interest rates in December is a reasonable and orderly rhythm arrangement. Worth pointing out that the interesting parts of the market just is that once a consensus is formed, the sensitivity will decline.In December after the federal reserve to raise interest rates to become big probability event, the market's attention had begun to spread.The author thinks that, Mongolian long appropriate looking quantity, the probability of the federal reserve to raise interest rates is not really a worth too much discussion, however, the federal reserve to raise interest rates meaning still worth pondering for a long time.It must be pointed out that raising
interest rates for the first time is in the nature of incomparable inflection point, look from the history, the long period basic interest rates in America for ten years at a time, often between two inflection point at the bottom of the jug with a complete cycle.Today, the federal reserve to raise interest rates in December 2015 a fait accompli, history has opened a new page, not only the American economy, the global economy. So, the federal reserve to raise interest rates in the long term, what change?The author argued that there are three kinds of deep change worthy of attention: first, the formal formation of the United States and the world will double cycle mismatch of the real economy and monetary policy.It is important to note that since the 2008 crisis, the fed did not happen during the policy shift, and including the European central bank and the bank of China, most of the other major central Banks are once in 2010-2011 short inflation pressure for higher interest rates policy again and again.So, the federal reserve to raise interest rates is the policy of fundamental improvement in economic fundamentals.The current big probability, in December, the fed will raise rates not only, the European central bank will also be in the negative away on the point of no return, global policy formally in the path of parted ways, this in fact is also a policy to confirm the differentiation of economic
fundamentals.America's business cycle and policy cycle, will lead the world at the same time, this will be the future global economic, political
and social ecological changes, have a profound impact.
Second, the global arbitrage fundamental changes in the
environment.The global carry trade is a hotbed of interest rate and exchange rate of the regional difference, since the crisis, the global differentiation of economic fundamentals and policy created conditions for the carry trade scale expanding.Due to the relatively high stability of the fed's zero interest rate policy, the dollar has been the important funding currency, and higher interest rates, currency appreciation expectations, strong and return on assets is higher economy becomes the main arbitrage investment direction.Once interest rates in December, the fed will officially enter the rates for promotion channel for a long time, the comparative advantage of the dollar as a funding currency will significantly weaker than the negative monetary easing infinite upping the yen and the euro, and in the commodities market turmoil, emerging market currencies competitive devaluations and the context of the global return on assets and arbitrage investment direction will change, the carry trade itself will also be more difficult to obtain stable long-term returns.Carry the change of environment will bring more to the global financial market volatility risk and structural variables. Third, the United States and the hegemony of dollar regain stability of comparative advantage.In the short term, the federal reserve to raise interest rates for the first time is often accompanied by short-term
header and subsequent super tonal dollar depreciation, but in the long term, the us capital markets and the dollar still has the fundamentals.In fact, the fall in global economic growth center, the context of the globalization tide, the market turmoil and geopolitical instability is becoming a new normal, France violence could events and Turkey friction is the latest example, Russia and the United States and the dollar in the cycle stability advantages will further highlight, and the hegemony in the United States to maintain and strengthen global governance. There is no doubt that the federal reserve to raise interest rates is a big event, because it opened the prelude to ten new cycle at an annual rate in the United States, which opened a new page of history.For China, in a new page, and how to write a part of their own?The author thought that the federal reserve to raise interest rates the direct impact on China's economy may not be big, but indirect effects.After the federal reserve to raise interest rates, China's economy still needs to plan as a whole and preventive and for those routes inside and outside, and the Chinese economy is strong, space and style in the new environment.
First of all, prevent market volatility risk is short-term task.It is worth noting that December is RMB entered the SDR, the European central bank to cut interest rates, the fed to raise interest rates and other big events overlapping in "big", market volatility will significantly increase, do not rule out the possibility of a short-term black swan, China needs to
carefully deal with, prevent external risks may impact.Second, maintain the RMB exchange rate stability is a long-term task.Double mismatch in the economic and monetary cycle of international environment, the RMB exchange rate will often face downward pressure, long-term response to the need to gradually resolve the devaluation expectations, by the way of ShuDu simultaneously and stronger fundamentals to solidify the material basis for long-term stability of RMB exchange rate.Included in the SDR, the internationalisation of the renminbi will accelerate under the support from the international credit endorsement, and deeper to China create opportunities to participate in global economic governance, the process, keep the two-way exchange rate fluctuations in the overall stability is always a top priority.Finally, set up new label endogenous growth is the core task.The federal reserve to raise interest rates change, is the external environment, the external environment in the aftermath of the crisis is becoming more and more complex.Only strengthen demand policy and supply policy of collocation, orderly promote the reform of economic system, accelerate economic restructuring, accelerate the building of service industry as the leading consumer economy, make the new consumption leading the new investment, create a new, set up the new labels, endogenous growth of China's economy to achieve long-term in the complicated external environment, the sustainable healthy development.