Greenspan problem why reappear after the federal
reserve to raise interest rates
A decade ago,The federal reserve(FED), a former chairman of theAlan greenspan(Alan Greenspan) put forward such a problem: the central bankIncreases in interest ratesAfter long-term yields basic unaffected.
In early 2005, Alan greenspan fed into her problem: when the fed raised short-term interest rates, but America's long-term interest rates are steadily.To this, Mr Greenspan's successor, Mr Bernanke (Ben Shalom Bernanke) explain that this is because, some Asian countries and oil producers savings can absorb us treasuries.
On December 16, the fed is expected to raise interest rates by 25 basis points, before so this is the federal reserve to raise interest rates for the first time in nearly a decade.After the raising interest rates, sure enough, "greenspan problem".To raise interest rates just a few hours, the United States Treasury rates curve becomes more smooth, short-term treasuries (2 years) and long-term U.S. debt (30-year) between spreads narrowed to 200 bp, under a new low 9 months.
The private bank, Brown Brothers Harriman, (global head of currency strategy at Brown Brothers Harriman), Marc Chandler, expects the fed to start tightening monetary and then the possibility of long-term yields lower, because the countries and regions outside the United States is still in practice the extraordinary easing, at low prices, a weak global growth, low inflation.
JPMorgan Chase (JPMorgan Chase), an analyst at Niko Panigirtzoglou and his team analysis: if long-term interest rates are more important than short-term interest rates, the fed's current and future increases in interest rates will have a significant impact?In long-term interest rates fluctuate with short-term interest rates when the answer is "YES", but this kind of transmission mechanism is not established, especially given that the fed will continue to roll over due debt, the loan of government bonds and government agencies to reinvest the principal of the securities mature.
Panigirtzoglou also pointed out that the previous round of interest-rate increases (2004 to 2006) reminds us that the problems of short - and long-term interest rates transmission mechanism is a question of how a headache.At that time, the fed raised target for the federal funds rate by 425 basis points, but the 10-year bond yields rose by 25 basis points only.Conduction block or "debt problem" is mainly due to the enterprises in developed countries and emerging economies are the result of saving power.The power savings will block the interest rate transmission channel length again?
From the conclusion, these two factors have not disappeared, analysis is as follows:
First of all, the developed countries.
For the first factor which causes the savings glut, jpmorgan chase, driven by the United States department of non-financial companies, has fallen steadily since 2009 us companies save, but from a very high level.
Given the financial sector and the capital surplus, including Europe, Japan, in the second quarter of this year G4 overall enterprise surplus countries is still close to 2005 highs.
In a growing economy, the corporate sector is usually financial assets, the net producer of today has become a net accumulation, this means that companies are no longer borrowing money for expansion and reinvestment, instead more savings