France Fears Losing AAA Rating &Nbsp; The Federal Reserve Relaxed And Optimistic.

After several days in a row

Global investors turned their attention to the Federal Reserve on Tuesday, hoping that QE3 (third round of quantitative easing) could act as the Savior.

When people saw or heard the FOMC statement for the first time, without finding QE3, the market began to plummet and fell by nearly 200 points in a few minutes.

The Fed stated in its FOMC statement that it is expected that

The FOMC statement sharply lowered the outlook for the economic outlook, which the Fed said was "much lower than expected" and pointed out that "the overall labor market environment deteriorated" and household expenditure was "flat", and supply chain breaking up accounted for only a part of the recent economic weakness.

The Committee further stressed the "downside risks to the economic outlook".

The optimistic Federal Reserve has used a lot of pessimistic words in its official statement. It seems to investors that this is the wrong judgment of the economy before the Fed recognised it.

Some traders even said that the Fed almost ruled that the economy was in recession.

The Fed therefore gave a strong hint that "the necessary policy tools to further enhance the economic recovery" were discussed, and "ready to use these tools at the right time".

In Goldman Sachs's view, this phrase means that if the economy deteriorates further, the Fed may further buy assets, that is, the door of QE3 remains open.

Because investors expect the fed to be low.

When yields are likely to remain at a very low level for a long time, the stock market becomes more attractive.

The lower the bond yield, the more attractive the stock will be.

Investors who had fully digested the FOMC statement began to enter the stock market in large numbers. The Dow Jones index staged a surprise reversal in more than an hour, rebounded 638 points, eventually closed up 430 points, and the three largest U.S. stock index rose by 4%-5%.

When the Asian market opened on Wednesday, optimism came from the other side of the ocean.

On Wednesday, the Shanghai Composite Index rose 0.9%, the Hongkong stock market rose 2.3%, and the Japanese stock market rose 1%.

But the optimism of the market ended when the European market opened, and all major indexes in European stock markets fell, including Italy and France.

Too many companies in Italy have fallen too much, resulting in a moratorium on pactions, including the joint St Paul bank and Italy Siena bank.

At 9:40 on the evening of August 10th in Beijing, the French stock market fell more than 3%.

French banks with the highest risk in Italy had the largest decline, reaching the lowest level in 52 weeks, with France's Societe Generale 12% down.

France has been the focus of attention since Monday when the S & P downgraded the US. Its credit default swap (CDS) has risen to its highest level in history, which means that the risk of default is increasing. People are worried that France will become the next country to lose its AAA rating.

French President Sarkozy temporarily decided to end his holiday early on Wednesday and flew back to Paris to discuss with ministers what measures to deal with potential crises and economic recession.

In order to maintain the French AAA rating, Sarkozy promised new measures on Wednesday to achieve the goal of deficit reduction.

France may be in danger of falling euro, and the euro fell nearly 1.3% to 1.4179 against the dollar on Wednesday.

On Wednesday, the US stock market opened lower and continued to decline. The three major stock indexes dropped by about 3% when the reporters finished the deadline.