Major Central Banks In The World Have Relaxed Monetary Policy.

As inflation and wage growth are blocked and worries about a strong dollar, the market expects the fed to continue to maintain the expression "patience" in the forward-looking guidance, thereby thoroughly eliminating the enthusiasm of investors expected to raise interest rates by the Federal Reserve in June.

From January 27th to January 28th, the Federal Open Market Committee of the Federal Reserve (FOMC) will convene a two day interest rate meeting. There is widespread uncertainty and expectation on the Federal Reserve and Yellen's view of the recent rise in the US dollar index and the prospects for us economic growth, especially salary and inflation growth.

Last Thursday (January 22nd), the European Central Bank launched the quantitative easing (QE) policy, including the purchase of government bonds, and some countries, including the SNB, the Bank of Canada, the Central Bank of India and the Danish Central Bank, lowered their interest rates in order to cope with more relaxed monetary policy. The two officials of the Bank of England who supported long-term interest rates also gave up their positions. This has made the Fed's monetary policy deviating from the monetary policy of the world's major economies more notable. Many investors are worried about whether the Federal Reserve can stick to the policy of tightening policy in a relaxed policy.

The most direct blow to the Fed's interest rate increase comes from the huge easing stimulus launched by the European Central Bank. The European Central Bank announced last Thursday that the scale of quantitative easing launched by the European Union broke through trillions of euros, and there was the possibility of a larger scale resulting from the extension of the plan. This directly impacted the euro exchange rate, thereby contributing to the rise of the US dollar index, and the just concluded Greek election further contributed to the rise of the US dollar index. The Greek radical leftist alliance, which won the general election, is about to form a coalition government with the independent Greek party, and will fulfill its commitments to end the fiscal tightening policy. The current situation with the European Union and the European Central Bank disagrees, which means that there is great uncertainty in the negotiations, and the risk of Greek debt default is still very high.

Although most US officials, including the US Treasury Secretary and Obama, are optimistic about the strong US dollar and the US economy, the market is concerned that the US dollar index, which is too strong, will damage us export and inflation growth and affect us wage growth.

Us salary growth declines in December job market The shadow of the sharp contrast of continuous improvement is still lingering. In an article on Monday, the financial times once again stressed the impact of the data on the Fed's monetary policy, saying that weak wages or prompting the us to postpone raising interest rates. Data show that in December, the number of non-agricultural employment increased by 252 thousand, and the unemployment rate dropped to 5.6%. The average hourly salary in the US in December 2014 dropped by 0.2% compared with that in November, rising by only 1.7% over the same period last year.

For the Federal Reserve, the measure Wage pressure A key indicator will be released on Friday (January 30th) when the United States will issue quarterly Employment Cost Index. If the data perform poorly, it will further crack down on the market's expectation of raising interest rates for the fed during the year. This data is considered to be more reliable than monthly salary data. In the 12 months ended last September, its pay sub index increased by 2.1%.

So far, about Federal Reserve Market expectations for raising interest rates have generally been postponed to September this year. Hiaasen, who has the reputation of the Federal Reserve news agency, said on Monday (January 26th) that the QE plan of the European Central Bank will have three effects on the Federal Reserve and may delay the Fed's interest rate increase plan.

Nomura Securities pointed out that the recent decline in core inflation data made the probability of interest rate increase in June very small. Judging from the latest minutes of the meeting, the Committee generally expects that interest rates will not be affected by external events. However, the economic data released since then, especially the core CPI, is lower than expected, which is extremely unfavorable to the Fed's interest rate hike.

After discussing the Nomura Securities economic team, it was concluded that FOMC would postpone the interest rate until September, but it is not expected that the committee will release the signal of interest rate hikes too clearly at this week's meeting so as not to mislead the market.

Williams, chairman of the San Francisco fed, said that the low yield of US Treasury bonds did not reflect the weakness of the US economy, but it reflected the weakness of the overseas economy. With the 10 year US bond yield falling below the Fed's 2-2.5% inflation target since January 9th, fed funds futures have postponed their interest rate hike to 9/10 months.