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The federal reserve announced to raise interest rates for the first time in nearly 10 years

By Tim James,2015-02-22 19:19
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The federal reserve announced to raise interest rates for the first time in nearly 10 years

    The federal reserve announced to raise interest rates for the

    first time in nearly 10 years

    Beijing time on December 17, the morning news, the fed announced the latest policy-setting meeting resolution, raised rates by 25 basis points, this is the first time since 2006, the federal reserve to raise interest rates, in line with the mainstream market expectations, officially marked the completely into the healthy growth of the new period.

    At the meeting, the fed's decision to benchmark interest rates to 0.25% to 0.5% of the target range, points out a series of indicators show that the job market to further improve the market, there is reason to believe that inflation will rise in the medium term to the committee's target of 2%.Statement at the same time, points out that after the rise of the fed's monetary policy stance will remain loose, to further improve of labor market conditions and support inflation back to 2%, the fed to raise interest rates rhythm judgment is still "gradual" (gradual adjustments).

    Lattice figure shows the fed expected rate could reach 1.375% by the end of 2016, which means that the federal reserve may raise interest rates next year, four times according to the rhythm of the 25 basis points at the time of calculation, means that the federal reserve may raise interest rates next year four times.Than expected in September at the same time, the officials of 2016 at an annual rate forecasting center of gravity moved up, part of that is beyond the previous market expectations.Officials also expected by the end of 2017, interest rates will reach 2.375%, to 3.25% at the end of 2018.

    The fed also said the economic activity and employment market risks has reached equilibrium, and points out that the development of the economy can only be make it have a reason to gradually raise the federalfundThe interest rate.Leave unused the federal reserve believes that the job market since 2015, "clearly resolve" earlier.Maintain long-term unemployment rate unchanged at 4.9%.Reasonable confidence to keep inflation rose to 2%.The fed said in a statement, securities and investment will have been implemented due to interest rate normalization to obtain the very good implementation.Overnight reverse repurchase will only be limited to the national debt SOMA valuations, think that moderate economic expansion at the same time, the housing market improves.

    The latest fed officials on the path for future rates expected "dot matrix figure", according to two officials should not be in 2015 is expected to raise interest rates.

    U.S. stocks rose after the federal reserve announced to raise interest rates.Among them, the financial sector rose significantly.In the fed's expected years raising interest rates rising, gold this year has been close to 10%, a slight rebound in the middle of this month.When the market rate of pay more attention to raising interest rates, rather than raise interest rates for the first time after time point, 1% rally in the last trading day of gold, and after the fed to raise interest rates, gold to continue to rise.

    As the fed to maintain 0% interest rates have 78 months, more than 1854 years since the U.S. economy through any a low recovery rates.Analysts say, whether stocks,

    bonds,commoditiesAnd other kinds of assets, will encounter a new round of the revaluation.

    Due to the contact of the global economy and financial markets increasingly close, China will inevitably impacted by the federal reserve to raise interest rates.The federal reserve to raise interest rates for China's influence is mainly manifested in three aspects:

    1, partial negative a-share influence

    For China, since 1994 the United States three rounds of austerity,The Shanghai composite indexWithin a month after the first rate hike is fall, after the first quarter's performance is poor, but this may be a more close relations and China's domestic factors, because in 1994, in 2004, even if the fed to raise interest rates before the Shanghai composite index is down.

    2, depreciate the renminbi

    People's livelihood fixed income securities analyst team GuanQing friends and Li Jilin wrote recently, long-term perspective, the federal reserve to raise interest rates would increase downward pressure on the RMB exchange rate.Since 2014, into the era of two-way fluctuation of RMB exchange rate, but the fluctuations in the central in the falling.An average of 6.16 yuan against the dollar in 2014, has been exiled to 6.47 in 2015.In the next few years could continue to depreciate the yuan central.

    Rockefeller & co, chief strategist at Zhang Zhiming said, at present the market is expected in the next few years the yuan will be slow to value orientation, also depends on the dollar appreciation.If the dollar to grow too fast, the RMB appreciation, together for the outlet pressure is too big.But if not really grow up with the euro, the yen, the pressure of RMB devaluation is relatively small.Overall, 3% a year against the us dollar depreciation, impact on China's economy will be conducive to exports.Over the past decade, the renminbi has risen a lot. At present, all countries in the currency wars are falling in value, if the renminbi depreciation is also reasonable.

    3, the debt risk

    Goldman sachsPoints out that emerging market credit leverage in the face of America's interest rates for the first time in nearly a decade will appear particularly vulnerable, the ratio of high countries such as China, South Korea, Turkey, Mexico, in particular to worry about.,

    Goldman sachs also said that the gap in China is also among the highest in the emerging market countries.But, in contrast, China's external lever and government leverage is not high.

    UBS (UBS), in addition to raising interest rates today, expect the fed to raise interest rates again in March next year, 2016, a total of 100 points higher interest rates.

    Morgan Stanley, said today to raise interest rates is important, but the second time the timing is the key problem, the reasonable possibility of march to raise interest rates should be close to 50%.

    French economy minister Emanuel - micronaire, according to the fed's interest rate will have significant influence on the euro zone, because of the European central bank has taken action, Europe has carried on the reform.

    Rockefeller & co, chief strategist at Zhang Zhiming said, at present the market is expected in the next few years the yuan will be slow to value orientation, also depends on the dollar appreciation.If the dollar to grow too fast, the RMB appreciation, together for the outlet pressure is too big.But if not really grow up with the euro, the yen, the pressure of RMB devaluation is relatively small.Overall, 3% a year against the us dollar depreciation, impact on China's economy will be conducive to exports.Over the past decade, the renminbi has risen a lot. At present, all countries in the currency wars are falling in value, if the renminbi depreciation is also reasonable.

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