The Fed's Meeting Hinted At This Year's Interest Rate Stability.

Today (April 15th) the Australian Federal Reserve (hereinafter referred to as the "Australian Federal Reserve") released a summary of the latest monetary policy meeting, saying that the current exchange rate level is still too high, and the latest wave of gains is not conducive to economic growth.

Australian union reserves said that the recent rebound in the Australian dollar has weakened its support for the economic recovery. The low Australian dollar exchange rate still plays a role in helping the economy return to balance.

In April 1st, the Australian Federal Reserve held a monetary policy conference. The conference finally decided to maintain interest rate of 2.5%, which is the seventh consecutive interest rate to maintain the lowest level in history. The minutes showed that when the discussion on financial markets was drawing to a close, the members suggested that interest rates in Australia would remain unchanged for the rest of the year.

　　 international economy situation

The minutes of the meeting showed that the April 1st monetary policy conference first summarized the global economy and the economic development of Australia's major trading partners. The main contents are as follows.

Recent global economic indicators show that the economic activity of Australia's major trading partners grew at an average speed in early 2014. Similarly, the growth of world trade in recent months has reached or even slightly exceeded the average growth rate over the past few years.

China's data in the first few months of 2014 showed that economic growth continued to slow down from the second half of 2013. China's GDP growth target was 7.5% in 2014, the same as in 2013. Chinese authorities' concerns about credit growth may limit economic stimulus measures and need to take some measures to stimulate economic growth. China's goal of maintaining inflation and monetary growth remained unchanged in 2014.

Recent data in the United States are in line with the moderate growth of further economic growth, despite the adverse effects of bad weather conditions in the winter, resulting in a temporary impact on economic activity in the first quarter of this year. Indications are that in recent months, investment in consumption and business in the United States has continued to rise, and the number of non farm payrolls increased in February over the average in 2013. Japan's domestic demand remains strong. Inflation has dropped slightly, and the impact of rising energy prices has begun to weaken as a result of the earlier devaluation of the yen. Some big companies have raised their basic salaries after consultation. In other parts of Southeast Asia, the trend of economic growth has remained at the average level in the past ten years, and the economic situation in India is still weak. In the euro area, GDP grew moderately in the fourth quarter of last year, achieving a continuous three quarter continuous growth. The latest indicators will expand further in the first quarter of this year.

　　 Domestic economic situation

In addition, the summary of the meeting also referred to the economic situation. The committee's first concern is the employment rate of the labour market in Australia. Despite the strong rise in employment in February, the domestic labour market in Australia remained weak. The unemployment rate has remained at 6% in February. Although a series of indicators of labor demand can moderately improve employment prospects, the unemployment rate is likely to increase slightly over a period of time.

Average income growth in 2013 has been weak, but members mentioned that GDP increased by 0.8% in the fourth quarter of last year and increased by 2.8% in 2013, which is stronger than expected. In the current quarter, exports increased further, consumption growth and residential investment rebounded, and business investment declined. The rise of non residential housing is strong and there is no mention of rising housing prices. Mining investment is declining, and weak public demand will limit economic growth over a period of time.

　　 financial market

Members pointed out that Australia's financial market was quiet since March. The focus is on the timing of the Fed's choice to withdraw from quantitative easing monetary policy and uncertainty about China's future economic trend.

Yields on government bonds have changed little in major markets such as the United States, Germany and Japan, while the peripheral countries in the euro area have continued to decline significantly in the past month. Yields on government bonds in Spain and Italy have fallen to their lowest level since the end of 2005. Yields on government bonds generally declined in emerging markets as concerns about the future prospects of individual economies. The Australian government has issued 7 billion worth of long-term government bonds due in April 2026 to meet the strong demand of domestic and foreign investors.

Exchange rate, the minutes show that the exchange rate is still too high, the recent wave of growth is not conducive to economic growth, the recent rebound in the Australian dollar, its support for the economic recovery weakened. The low Australian dollar exchange rate still plays a role in helping the economy return to balance.

When discussions about financial markets are drawing to a close, members imply that interest rates in Australia will remain unchanged for the rest of the year.