Global Signs Of Easy Money Are Obviously &Nbsp; China'S Rate Hike Is Expected To Cool.

The Australian central bank, the European Central Bank, the Bank of Japan, the Bank of England and other interest rates this week, the Fed will also discuss the new stimulus two weeks later. Economics Measures.

The central bank is expected to maintain or regain the market. Easy Monetary policy. At the same time, in order to resist the threat of the "two recession", many emerging economies cut their interest rates sharply under the pressure of high inflation. The signs of a new round of easing monetary policy worldwide are showing signs. This round of loosening of the world's monetary easing stems from the weak and urgent needs of the European and American economies.

situation

Europe, America and Japan set loose keynote

The latest data show that the two quarter of the euro zone's economic growth rate has slowed to 0.2%, not as good as 0.8% in the first quarter. The latest evidence from the sluggish U.S. economic recovery is based on data released by the US labor department in September 2nd, and the number of non farm employment in the US grew by zero in August, the worst record in nearly a year. In addition, the unemployment rate remained at 9.1%.

Economists believe that at the new round of policy meetings held in from September 20th to 21st, the Fed will not only maintain the minimum interest rate unchanged, but also decide to replace short-term securities in its 1 trillion and 650 billion US dollar portfolio with long-term bonds to further reduce the cost of credit.

At the new round of policy meetings of the Federal Reserve, we will discuss in detail the cost of each tool and what can be generated. benefit 。 Federal Reserve Chairman Bernanke recently said that the Federal Reserve still has many tools to use to implement monetary stimulus. According to a summary of the August 9th meeting of the FOMC, several Federal Reserve officials hope to take bolder action, and are willing to accept a more robust forward-looking guidance for more easing policies, which shows that the third round of quantitative easing policy will be an optional means.

For European monetary policy, Erian, chief executive of the Pacific (7.88, -0.18, -2.23%) investment management company (PIMCO), said that the euro zone's recession has risen to 50%, and the European Central Bank may have cut interest rates. Economists are also calling for the European Central Bank to cut interest rates and avoid recession. The European Central Bank will announce interest rate decisions on 8.

To control inflation, the European Central Bank has raised interest rates by 50 basis points to 1.5% this year. Central bank governor Tyse told the European Parliament at the end of last month that the central bank is reassessing price risk as the growth of the euro area economy slows down. The shadow Committee of the European Central Bank, composed of 15 economists and investment managers, warned in September 2nd that the contraction of manufacturing industry and the decline of corporate confidence in the second quarter of Europe may continue into the third quarter, calling on the European Central Bank to change the strategy of raising interest rates so as not to plunge the economy into recession.

Barclay Capital Inc Europe chief economist Crowe said: "I suggest that the ECB cut interest rates by 50 basis points to ensure that it can reduce the risk of a two degree recession. The deterioration of the economy is fast, warning the central bank to immediately lift interest rates.

Market participants are concerned by easing monetary policy to stimulate the economy.

John Silva, chief economist at Wells Fargo, said: "the main problem now is that low interest rates have been maintained for three years, but this has not been effective in stimulating consumption. If there is no demand in the market, there will be no increase in recruitment. The Federal Reserve can really reduce the cost of credit, but it can not require companies to increase recruitment. " Even Bernanke admits that the Fed's power alone is not enough to ensure a sustained recovery in the US economy. "The vast majority of economic policies that can ensure long-term growth of the US economy are outside the scope of the Fed's management," Bernanke said. According to the plan, President Obama will deliver a plan for stimulating employment and economic growth to the US Congress on 8 September. On the same day, Bernanke will also deliver a speech on the economic prospects.

Concerns about the ineffectiveness of stimulus measures also apply to Europe. Feldstein, a professor at Harvard University, believes that interest rate cuts may not improve the euro zone economy. Feldstein believes that the ECB can also emulate the Fed's interest rate drop to a certain level, but the situation may not change, because the ultra-low interest rate of the European Central Bank has failed to stop manufacturing, construction and consumer demand shrinking.

On the 7 day, the Bank of Japan will hold a monetary policy conference and announce interest rate resolutions. The market expects the Bank of Japan to maintain ultra-low interest rates from zero to 0.1%. Reuters analysis, following last month's relaxation of the policy, the Bank of Japan will observe the market changes, this month do not wait until October to relax the possibility of policy increases.

reality

G20 has two countries to take the lead in reducing interest rates.

The European debt crisis and global economic growth showed signs of slowing down, leading to the global stock market evaporating over $4 trillion in August.

Turkey's central bank in August 4th took the lead in lowering interest rates to an all-time low of 5.75%. In August 31st, Brazil also announced interest rate cuts, which might alarm other emerging countries and attract central banks to follow up interest rates. Mexico has said it may reduce the cost of borrowing. Experts say Russia also has the conditions to cut interest rates sharply.

Bliss Ki, senior European economist at ING, Brussels, said: "recent data have raised the possibility of a global recession in Holland. All circles are counting on the central bank to use stimulus measures again, and the question is whether the central bank wants to adopt such methods again. "

Bala Cooley, an economist at Nomura holdings in Singapore, said that in addition to a small number of countries such as India, which will raise interest rates, the Central Bank of Asia will basically "end the monetary tightening policy" because the "slowdown in growth will ease the pressure of price demand in Asian countries".

Condon, director of Asian Research at Holland International Group, Singapore, pointed out that price pressure relief will prompt some central banks to consider easing policies to stimulate economic growth. Brazil's unexpected rate cut in August 31st is one example. The Central Bank of Brazil changed its interest rate policy in August 31st and unexpectedly raised the benchmark interest rate because the global economy is "seriously deteriorating" and will have a chain impact on the local economy, ending the latest round of interest rate hikes that began early this year.

The bank also issued a long statement saying that the economic slowdown has replaced inflation as the main economic concern in the country. The statement said that the problem of developed countries will exacerbate the slowdown in growth that has already occurred in Brazil. Ramos, a Latin American economist at Goldman Sachs, said: "no one expected a cut in interest rates. The central bank is worried that the external shocks may worsen the slowdown." After Brazil cut interest rates, other central banks have also expressed their concern about the global economic slowdown.

The Central Bank of Mexico decided not to move at the end of 8, but at the same time suggested that interest rates could be considered once the domestic or global economic situation led to tighter monetary conditions. Harlan Haran, head of NWIManagement, a hedge fund group, says Mexico has a great chance of cutting interest rates. But even if the policy is relaxed, investors may still have a chance. It is suggested that some emerging economies should enter the bond market quickly before the rate cuts. Nomura Securities recently estimated that if the US economic data deteriorated seriously, the possibility of cutting interest rates by the end of the year in Mexico would increase by more than 50%.

Robertson, an economist at RenaissanceCapital, predicts that Brazil will further cut interest rates, and Russia may have the conditions to cut interest rates sharply.

Influence

China's rate hike is expected to cool

With the shift of monetary policy in some overseas economies, the rate of interest increase in the domestic market has decreased significantly recently. More experts and agencies believe that at least in the near future, China's monetary policy should be based on observation.

Wang Dashu, Professor of economics at Peking University, told the economic reference daily that China is facing a dilemma. On the one hand, the pressure of rising prices is still more prominent. The CPI is expected to increase by about 6% in August. Moreover, from the previous situation, China's reserve ratio has been raised to a higher level. However, quantitative tools have not played a good role in restraining price rise. But on the other hand, the international economic recovery is slow, and the domestic economic growth rate is also facing a slide.

"I personally believe that this year's pressure of rising prices is so great that raising interest rates is still necessary. But it should not be added at the moment, or we should first look at the economic situation at home and abroad. Said Wang Da Shu.

Zheng Chaoyu, Professor of economics at Renmin University, believes that rates should not be raised. He told the economic reference Daily: China's current pressure of rising prices is so great that people's dissatisfaction with negative interest rates is rising. They must not cut interest rates as Brazil does. But raising interest rates may not be a good idea. In the past, when China's economy was overheating, the choice of monetary policy was very simple. Raising interest rates could prevent overheating and control prices. But now China's economy is still in the recovery stage, and it is not appropriate to raise interest rates rashly, especially now that China's interest rates are higher than many countries. Raising interest rates may also lead to more hot money inflows.

Zheng Chaoyu believes that the difference between China and Western countries is that interest rates are not marketable, so they can achieve the same effect as raising interest rates directly by controlling the amount of credit.

Liu Xiahui, a researcher at the Institute of economics of the Chinese Academy of Social Sciences, also predicted that the price inflation might slow down in the second half of the year, and that monetary policy might not be further tightened.

Agencies also hold similar views. Minsheng Securities believes that the 3 quarter will not raise interest rates. The report issued by the broker gives four reasons: first, compared to the one-year deposit rate of 4.14% of the CPI year-on-year increase in 2008, the current relative interest rate level is higher than that of 2008, and the interest rate hike may increase again; two, according to the current real interest rate of the funds and the capacity of the enterprises, the possibility of raising interest rates again is small; three, the domestic demand is slowing down, the European and American economies are weak, the export of the 4 quarter may decline, four is the domestic CPI falling trend, and the major international economies still maintain low interest rates, and there is a possibility of further quantitative easing. CIC is also expected to lower interest rates in September.

However, in September 1st, Wen Jiabao's article published by "seeking truth" magazine made the market have some differentiation on the judgement of raising interest rates in September. As interpreted by Huachang securities, the article in monetary policy may contain three meanings: the tight monetary policy remains unchanged; the foreign economic situation will have an impact on monetary policy making; there is still room for the regulation of off balance sheet business, interest rate and exchange rate adjustment.

Liu Ligang, director of economic research at the Greater China region of ANZ, also believes that China's overall inflationary pressure is still relatively large. The central bank will raise the benchmark interest rate again within the year, but it is hard to predict whether the rate hike will be in September.