US Monetary Policy Is Becoming More And More Inclined To "Made In China".

In some people's eyes, the Fed's monetary policy can be labeled "MADE IN CHINA" to a certain extent.

This is of course exaggerated, but it is an indisputable fact that China has a certain influence on the monetary policy of the Federal Reserve.

With globalization becoming more and more extensive today, especially since last year, no central bank of any major economy can be completely independent from the world.

PIMCO global economic adviser Joachim Fels is one of those who hold these positions.

He gave several reasons for the Fed's monetary policy being influenced by China:

Last year, Federal Reserve Chairman Yellen and other Fed officials seemed ready to raise interest rates in September of that year.

However, in the middle of August, China unexpectedly made the RMB depreciate sharply, triggering a sharp shock in the global market.

Fed worried about the impact of financial markets on the US economy, Yellen told reporters at the time that the September conference focused on China's risks.

Ultimately, the Fed chose to raise interest rates in December instead of September.

"If it were not for China and the turmoil surrounding China, I think the Fed has increased interest rates," said Mickey Levy, chief Asia and American economist at berlberg.

Looking back this year, Yellen and her colleagues appear to be preparing for the second increase in interest rates in March.

In the following January, China allowed the renminbi to depreciate again, and the global financial market was once again startled.

Yellen said at a congressional hearing in mid February that China's exchange rate caused turbulence in the international financial market, and that international factors such as China's monetary policy and economic slowdown could pose a threat to the US economy.

She also said that the US economy is facing some global threat factors, which may hinder the growth of the US economy and force the Federal Reserve to slow down and raise interest rates.

The Fed says monetary policy depends on

Performance.

And Joachim Fels believes that more than that, the US monetary policy obviously needs to consider the financial environment.

Therefore, if China's actions or policies destroy the market (whether the stock market falls or the corporate bond yield rises or the US dollar goes strong), leading to the tightening of the financial environment in the US, the Federal Reserve will join the appraisal when making monetary policy, because that has a latent impact on the US economy.

In fact, Yellen announced in September last year not.

At the same time, it is rare to say that China is the focus of attention of the Federal Reserve.

As far as the Fed is concerned, it is clear that China's economic slowdown and stock market crash are one of the factors that will result in a temporary increase in interest rates. This will also have an impact in the future.

China has never been mentioned before in such meetings.

It is worth noting that the influence of China and the United States is not one-way, but mutual.

The Central Bank of China and the New York Federal Reserve held a rare joint meeting in February 29th.

Chen Yulu, deputy governor of the Central Bank of China, said that the central bank should work more closely to tackle the global problem at the meeting of the 2016 high level dialogue between the central bank and the US central bank.

The synergistic effect weakened.

For the United States, it is clear that the United States can not isolate itself from the world, and isolate itself from the outside world.

If from the point of view of international trade, although the proportion of US exports to China in GDP is less than 1%, it seems that China's influence is limited, but if we expand the scope of observation, considering that China is the world's largest commodity consumer country, China's economic slowdown will have a huge impact on other countries.

Lagarde, President of IMF, admitted in September last year that China's influence exceeded expectations.

Lael Brainard, the Fed's governor, said on Monday that the Federal Reserve needs to consider Chinese factors when formulating monetary policy.

Williams, chairman of the San Francisco fed, said last week that the Fed is paying close attention to the trend of China's economy, and that the stock market does not well reflect the economic situation, and that the slowdown in China's economy will continue to affect the commodity market.