How To Solve The Question Mark Left Behind By "Double Fall"?

I always have a view that China's monetary policy is too mechanical and dogmatic.

What do I mean by watching data manipulation instead of watching people's hearts and market expectations?

This is a big problem.

Because when we see the data, the actual problem may be very serious, which actually leads to "lag" in policy control, which is obviously contrary to the "foresight and flexibility" of monetary policy and the requirement of "pre fine adjustment".

Isn't it? The central bank has given the policy explanation of the "double drop" lag.

When it comes to the issue of "reducing interest rates", the central bank points out: "the overall price of goods in September is going down. It is necessary to appropriately reduce the nominal interest rate to return the real interest rate to a reasonable level, to further reduce the cost of social financing, and to increase the strength of financial support for the real economy.

As you can see, CPI rose 1.6% in September, down 0.4 percentage points from August.

Besides, the adjustment of benchmark interest rate is mainly observed.

Besides, we should also refer to the GDP deflator and other price indices.

Statistics show that the GDP deflator is lower than CPI, and the GDP deflator of the first three quarters is -0.3%.

In addition, PPI fell by 5.9% in September, which has been negative for 43 consecutive months.

Therefore, it is reasonable and feasible to lower the benchmark interest rate as the overall price level goes down.

From the interpretation of the "double down" policy, the central bank has also written the most ink on the issue of rationing and improving the pmission mechanism of monetary policy (interest rate).

The article said: "specifically, it is necessary to build and improve the central bank policy interest rate system, so as to guide and regulate the market interest rate.

At the same time, we should speed up the market benchmark interest rate and yield curve, so that all kinds of financial products have their market pricing benchmark, and add a differential interest rate pricing on the benchmark interest rate.

Not bad.

This is exactly a big problem we have been concerned about: who is the benchmark interest rate given by the central bank? Is it SHIBOR? How does the future central bank control SHIBOR? The key is: after the interest rate is thoroughly marketed, the central bank needs to raise interest rates and cut interest rates. Which interest rate will it target? In other words, the central bank can directly control the benchmark interest rate (such as "reloan interest rate"), so far, we can not see clearly.

I am afraid that the central bank has no conditions to cancel it.

The key.

The central bank said, "to cancel the benchmark rate of deposit and loan needs a pitional period", and two things must be done in this pitional period.

First, establish the benchmark interest rate that the central bank can directly control; second, straighten out.

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There is no doubt that the two key issues have not been completed so far.

The first thing we said just now is to establish the benchmark interest rate that the central bank can directly control.

Is the matter of "straightening out the interest rate system" finished? Of course not.

Does reading this text give people a sense of "mechanical and dogmatic"? At least I have.

The announcement of the Fed's Conference on interest rates has never been expressed in this way.

The explanation given by them is usually the "judgment" of the members of the Monetary Policy Committee on key issues such as economy, price and employment in the future.

Therefore, they are senior in the "higher interest rate changes to more impact on market expectations for the future", rather than China after seeing data, "data for data" regulation.

Why do we need to talk about this problem again and again today? Because a major move with this "double drop" is to "push interest rate marketization".

For finance, it can be said that this is a very important reform. It is not only related to China's future pricing of all financial products, but also crucial to the success or failure of China's future monetary policy regulation.

In fact, this is also a problem which the central bank is very concerned about.

Therefore, while announcing "releasing the upper limit of deposit interest rate floating cap control" of depository financial institutions, they said: "we should speed up the marketization and regulation mechanism of interest rates, strengthen the central bank's regulation and supervision of interest rate system, and improve the efficiency of monetary policy pmission."

Let me give you an example.

After the "double fall" of the central bank, the one-year deposit benchmark interest rate has dropped to 1.5%, but it is also the benchmark interest rate for commercial banks at the cost end, SHIBOR, which is currently up to 3.39% a year.

Is this not a serious interest rate upside down? After the interest rate liberalization, can the central bank allow the commercial bank's one-year deposit interest rate to float to 3.39%? Is it raising interest rates or reducing interest rates? It is estimated that the central bank should also suppress the commercial bank deposits and loan interest rates through "window guidance" or "administrative intervention".