The Market Will Force The "Central Mother" To The Corner.

This year, the global market was volatile and the stock market plummeted. For the first time since the financial crisis, it plunged into a technical bear market. Commodity diving plunged oil prices to $28 / barrel for the first time.

Such a chaotic market will force the "central mother" to the corner of the world. Has the magic mother who has ever had the magic power now been "desperate?"

At present, in order to deal with

Severe fluctuations, low oil prices and the impact of China's economic slowdown, the Federal Reserve, the European Central Bank, the Bank of Japan and so on once again face the pressure to cut interest rates or expand QE.

Europe

The European central bank governor Delagi said on Thursday that the downward risk of the economy is rising again, and strongly suggests that the ECB may increase its easing stimulus in March to cope with the persistent low inflation caused by the economic slowdown and the fall in oil prices.

Delagi said, "we will not give up and will not bow to these global factors."

Delagi also called Europe.

Capable, determined and willing to take action, the market should not be suspicious of the willingness of the European Central Bank.

Japan

Under the pressure of external environment, the Bank of Japan has stepped up its pressure on easing.

In less than a year, the Bank of Japan has postponed its 2% inflation target for the third time, and is expected to achieve it in the second half of fiscal 2016.

Since 2014, Kuroda Higashihiko, governor of the Bank of Japan, has refused to further expand the asset purchase plan.

He believes that the recent CPI growth is mainly due to the decline in oil prices, which is external factors, not because of the influence of the Bank of Japan policy.

However, the current economic situation has made the BoJ "involuntarily", the Japanese economy is struggling: inflation rate is close to zero, the stock market has been sell-off, the wage rise has been suppressed, and the yen has strengthened, making the market expect the Bank of Japan to take action in January at the 28-29 monetary policy meeting.

The Wall Street Journal quoted an assistant from Japanese Prime Minister Abe Shinzo as saying that the Bank of Japan should take action next week, and the conditions for further easing the policy are in place.

He also expressed concern about the possible damage to the credibility of the Bank of Japan if it does not act. "This may damage or even destroy the basic framework of Andouble economics. Whether Andouble economics can succeed depends on whether we can create expectations for future inflation".

But if the Bank of Japan's actions are ineffective or inefficient, investors may think that the central bank's policy ammunition has been exhausted, thereby weakening investors' confidence in Kuroda Higashihiko's ability to deal with potential shocks.

According to Wall Street, by the impact of energy and food prices decline, US consumer prices unexpectedly slipped in December, signs of weak inflation appeared, and the Fed's interest rate hike in March was further reduced.

In addition, US housing starts and construction permits decreased in December, and retail sales, industrial production, exports, inventories and manufacturing data were all weak.

The number of Americans who applied for unemployment last week hit a 6 month high, suggesting that January's non-agricultural data may be poor.

There are indications that the recent slowdown in the US economy has slowed sharply.

In addition, Mark Carney, the governor of the Bank of England, said earlier this week that it is not urgent to raise interest rates, and that the timing of raising interest rates is unknown.

Recently, the Central Bank of China has been hitting the "red enveloped rain". Only yesterday, the central bank put liquidity into the market for at least 725 billion yuan, and in the past two weeks, the amount of money invested by the central bank has reached 15000 billion.

The central bank is already at risk?

Zerohedge, a US financial blogger, believes that the central banks of many countries have few chips in their hands.

Zerohedge sarcastically, if the Fed announces QE, investors buy assets and expect the Fed's stimulus to succeed, effectively pushing up asset prices.

Once the Fed fails to generate self reinforcement, such a method will fail.

When market expectations return to prudence, central banks will lose the ability to prop up markets through declarations.

Federal reserve fund interest rate futures show that the first rate hike this year has been postponed from April to June, and the interest rate hike has dropped from 3-4 to 2.