International finance and economics focus: the federal
reserve to raise interest rates further
16 the fed as expected to announce the interest rates for the first time in nearly a decade, will go up in the federal funds rate by 25 basis points to 0.25% to 0.5%.Because the message has been fully digested, the U.S. stock market stable, up close.And the fed follow-up will be how to grasp the rhythm of further rate increases, become the focus of market attention.
Analysts expect the future the federal reserve will adopt a cautious and gradual rate increases.From the point of the whole cycle, the federal reserve to raise interest rates to the influence of the market, especially in emerging markets spillover effect will continue to concern.
"Boots" landing a rising stock market
The fed at the end of this year finally said in a statement after a monetary policy meeting, this year in the United States significantly improve the job market, there is reason to believe that inflation will be closer to 2% of the medium-term goal [considering the economic prospects and the existing policies need to a period of time to affect the future state of the economy, the federal reserve's decision to start raising interest rates now.
Yellen said in a press conference, chairman of the federal reserve, the global economic risks remain, but the us economy is strong.Decision reflects the fed's confidence in the economy, the federal reserve to raise interest rates set has many conditions.
Former fed chief economist David stockton told xinhua reporters that the United States a strong recovery is the material base of the fed started raising interest rates, especially in the labor market performance of the early meet the terms of interest rates.
Before Wall Street's most experts believe the fed will start raising interest rates in December, the announced just "boots to the ground".American cartoon, Keith bliss, senior vice President told reporters that if the fed failed to start raising interest rates on the meeting, the stock market will face downward pressure.
Yellen stressed that if the fed too long delayed monetary normalization process, which employment and inflation will likely face "overshoot," lead to overheating, if suddenly tightening monetary policy will make economy faces the risk of a recession again.
, however, there is a market for the expert points out, although the rate of "boots" be born after market smoothly, but does not mean that eliminate risk.The world bankEconomists, mark said that the federal reserve to raise interest rates in line with market expectations, but that doesn't mean the financial markets will therefore running smoothly.
Cautious gradually raising interest rates in the future
Although has started raising interest rates, but the pace of the after market analysts expect the fed will not "radical".
Yellen, said the fed's subsequent rate increases will depend on the economic data, the pace of the normalization of monetary policy will be cautious and gradual, but is not necessarily to propulsion machinery, uniform speed.If disappointing economic development, the fed will implement a more relaxed monetary policy.
DBS bank economic and foreign currency, managing director of research at DBS, argues that the fed to raise interest rates timing has certain risk, but it is helpless choice.Many industry investment remains weak, the federal reserve to raise interest rates at this time choice, also hope subsequent can slowly raising interest rates.
16 the fed's quarterly economic forecasts, according to federal reserve officials expected by the end of 2016, the federal funds rate will reach 1.4%, if according to raise interest rates by 25 basis points at the time of calculation, this means that there will be four times to raise interest rates next year.But stockton, expects inflation is unlikely to have obvious improvement in the coming months, the fed's next interest rates might have to wait until April 2016 or 6 months.
Stockton said, the fed does not want to let the thought to raise interest rates path, there are stereotypes.Although the job market rate conditions, but inflation has not reached the fed's target, so increases the rhythm will be more depends on the change of inflation in the future.Too fast to raise interest rates to economic risk will be bigger than the too slow to raise interest rates.
Emerging markets hit hard to break
The fed's confidence in U.S. economic outlook, to facilitate cross-border capital flow, the United States.The fed into the cycle, for other economies, especially emerging economies, an obvious risk is cash flow reversal.
The washington-based institute of international finance recently reported, influenced by the fed to raise interest rates and slowing economic growth, this year the main emerging economies will face capital outflows for the first time in 27 years, total amount will amount to more than $500 billion.Major emerging economies next year will also faces more than $3000 in capital outflows.
But there are some analysts believe that despite the emerging economies are facing serious challenges, but not the possibility of another financial crisis.After the first two after the baptism of the financial crisis, many emerging economies are in current account deficit down, has introduced a more flexible exchange rate system, it could bolster the ability of resisting external financial risk.
American international group, managing director and deputy chief economist MoHengYong said: "if the fed to raise interest rates in emerging markets is a pressure cooker, then this pot has been uncovered several times, is the first time in 2013, Mr Bernanke put forward the exit of quantitative easing, most recently in September this year the market is expected to raise interest rates, so the pressure is not so big."
American interest rates spillover effects
Nyse veteran trader Stephen gill foy told reporters, raising interest rates to $in the money market is a big positive, but a stronger dollar also must make commodity prices, including the international oil prices remain under pressure.
The federal reserve to raise interest rates will lead to a stronger dollar.In view of the monetary policy in the United States and other major economies increasingly differentiation, huge spreads more will make money is flowing more interest in the highlands of the United States.Some emerging economies may face capital outflows, stocks have fallen sharply, currency devaluation, debt service pressure, etc.
The world bank recently warned that the federal reserve to raise interest rates gradually tightening will give emerging economies financing conditions, capital movements will intensify.The federal reserve and other major central Banks monetary policy further differentiation could further push up the dollar, increasing emerging market exchange rate risk.
The effects of the federal reserve to raise interest rates and the potential impact that the international economic and financial order has been a major defects existing in the highlights.Dollar is America's sovereign currency and international reserve currency, which means that the United States based on domestic economic operation condition to adjust monetary policy when, from time to time there will be a negative spillover effect.
Especially in the era of global economic and financial integration, this also means that the economies around the world should strengthen economic and financial policy coordination, especially in the decision of the United States, also should consider the interests of other countries.