A New Round of Quantitative Easing Policy Implemented Immediately
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St. Louis Federal Reserve Bank President Brad September 28, said he persuaded the Fed to purchase securities of other senior officials to consider policy has made some progress. This shows that the Fed is considering the national debt through the implementation of more flexible policies to stimulate the purchase of the economy.
On the same day, Japan's Kyodo News reported that the Japanese central bank will hold an emergency meeting in early October, when the scale or will expand the low-interest credit to 50 trillion yen. In addition, the Bank of England and European Central Bank also said that in the short term will not exit the loose monetary policy, the Bank of England even consider further expanding the scale of quantitative easing.
Despite the already rampant global liquidity, but the major developed economies still tend to flow again to the "ocean" poured more money.
Fed seeking flexible "excitement"
Last week, the Federal Open Market Committee said the United States eased concerns about inflation, said that if economic conditions require, the Federal Reserve is prepared to provide additional financial support. Analysts pointed out that the form of this support may include expanding the size of government bonds and other asset purchases. The Fed has made in March 2009 in 6 months the scale of 300 billion U.S. dollars to buy U.S. Treasury's decision, the decision making in a way the U.S. financial system back to life.
However, because the market is awash with liquidity, more liberal policy of converting from a real role to boost the economy, the Fed is seeking to further stimulate the internal economy is actually the proper way. Brad said: "The large-scale purchase of government bonds," this practice is rarely the best way to implement monetary policy, but "if not a true case of extraordinary circumstances, (the Fed) will not take this approach."
Analysts believe the Fed is currently a tendency to purchase within the strategy is to first declare a period of time to buy a small scale of U.S. Treasury bonds, but whether it really depends on economic conditions and further to buy - if the accelerated economic growth, Fed officials or that do not need to take any action. This strategy will allow the Federal Reserve in the face of the uncertainty of economic recovery, in the further issue to stimulate economic recovery have more room for maneuver.
Bank of Japan or expand the size of credit
Bank of Japan will be 4 to 5 October to discuss whether to take further easing in response to the country's economy stronger yen negative impact. Sources said the bank may further expand the scale of low-interest credit to 50 trillion yen.
Bank of Japan had held an emergency meeting on interest rates by the end of August, and announced to maintain 20 trillion yen in the 3-month fixed interest rate of 0.1% based on the size of loans, an increase of 10 trillion yen of new 6-month fixed-rate loan tools in response to a stronger yen impact on the country's economic recovery. In addition, the Japanese government introduced a scale of 915 billion yen in the new economic stimulus plan, and in September 15 direct intervention in currency markets. But the frustration and further quantitative easing by the Fed is expected to influence investors to sell the dollar recently accelerated, holdings of yen assets, leading to continued strength in the yen exchange rate.
Britain and Europe hard holding stability
28 Office for National Statistics said the second quarter, UK gross domestic product (GDP) growth of 1.2% qoq, record the fastest growth rate of 9 years. Nevertheless, economists are still worried, because most of Britain austerity measures implemented in 2011, fear of the future of the country's economic growth unsustainable. In view of this, the Bank of England likely to further expand the quantitative easing policy.
In addition, the Bank of England Monetary Policy Committee meeting in September shows that most members considered that the introduction of the line should be further monetary stimulus. Posen said that members of the Committee, to ensure steady economic growth, the Bank should expand the quantitative easing program, acquire more assets. Posen said: "The central bank should not be worried about inflation to be satisfied with weak economic growth."
On the same day, the European Central Bank released the latest report, in August, the euro area households and businesses received loans increased by 1.2 percentage points per annum, the highest the fastest pace in 14 months; used to measure the level of inflation data - M3 money supply also increased by 1.1 percentage points per annum. The bank executive board member Stark said the data showed the euro zone has been set foot on the road of credit growth, the ECB is gradually withdraw from unconventional monetary stimulus. However, the Bank president Jean-Claude Trichet reiterated the economic outlook for Europe's caution, he said the ECB now adopt a more accommodative monetary policy is "appropriate", and the euro area will slow the pace of economic recovery, but still full of uncertainty. |
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By :
Jessie Stone
Submitted
2010-10-06 11:38:37 |
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