China-Singapore Jingwei client, April 30 (Zhang Shunan) After a total of 150 basis points of emergency interest rate cut in March, the Fed temporarily "fired". In the early morning of 30th Beijing time, after the two-day interest rate meeting, the Fed announced that it would maintain the current interest rate at 0% -0.25%.
Will keep interest rates low until inflation is back on track
Data graph: Federal Reserve. China-Singapore latitude and longitude photo
At a press conference held on the 30th, the Fed stated that the members unanimously agreed to the interest rate decision; the public health crisis has put heavy pressure on economic activity; the interest rate will remain low until the Fed is confident that inflation can return to the right track; Need to purchase government bonds and mortgage-backed securities in quantities.
In order to boost the US economy, the Fed has frequently "opened the gates and released water" recently, cutting interest rates by 50 basis points and 100 basis points on March 3 and March 16, Beijing time, respectively. In addition, since the epidemic spread overseas, the Fed has successively offered unlimited quantitative easing, providing loans of up to US $ 2.3 trillion, and a new emergency loan plan for medium-sized enterprises.
On March 15, US Eastern Time, US President Trump held a press conference. He said at the press conference that he was "very happy" with the Fed's interest rate cut and that the market should be "excited" by the Fed's actions.
In fact, it was not unexpected to announce that the interest rate will remain unchanged after the April meeting on interest rates. The minutes of the Fed ’s March 2 and March 15 meeting show that the interest rate will remain near zero until the economy returns to its target track. Fed Chairman Powell has repeatedly stated that the Fed is unlikely to accept negative interest rates as the next step to help the economy. Negative interest rate policies are not very suitable for the United States.
Fed observer Tim Duy believes that the Fed has recently "opened gates to release water", which has led to a tightening of governance space. In addition to keeping the financial markets running at the moment, I can't see what the Fed can do. Goldman Sachs believes that Fed officials should be relatively satisfied with the current policy. It is expected that the Fed will not raise interest rates until the end of 2023.
Super central bank strikes
New latitude and longitude in the data map
Affected by the epidemic, the stock market was thrilling in March. U.S. stocks ended badly in the first quarter. The Dow fell 23.2%, the largest quarterly decline since 1987; S & P fell 20%, the largest single-quarter decline since the fourth quarter of 2008.
In the European market, the major European stock indexes fell by nearly 25% in the first quarter, the German DAX index fell by 25.01%, the French stock market CAC40 index fell by 26.4%, and the British stock market FTSE 100 index fell by 24.8%. In addition, Barclays, HSBC Holdings, Standard Chartered and many other British banks have previously issued a joint statement that they will cancel last year's dividends and suspend this year's dividend payment, and will not carry out any stock repurchase.
In the Asia-Pacific stock market, the Korea Composite Index and the Nikkei 225 Index fell 20.16% and 20.04% respectively in the first quarter.
It is worth mentioning that the last week of April has attracted much market attention. From week to week, Japan, the United States and the European Central Bank have successively announced interest rate resolutions.
On April 27, the Bank of Japan announced that the benchmark interest rate would remain unchanged at -0.1%, and the 10-year Treasury yield would remain unchanged at around 0%. At the same time, the Bank of Japan will purchase unlimited amounts of Japanese government bonds and remove the ceiling on the purchase of each corporate bond. Bank of Japan Governor Haruhiko Kuroda said that he will not exclude further reductions in negative interest rates from future policy options, and will take corrective actions as appropriate.
On April 30, the European Central Bank will also announce its interest rate decision. Reuters quoted economists' view that the European Central Bank will expand the scale of its emergency purchase plan announced in March, and further expand the scale of the "quantitative easing" plan. According to the plan, the European Central Bank has purchased 2.8 trillion euros in assets. Barclays bank analysis, the European Central Bank or announced the expansion of bond purchase plan to 1.5 trillion euros.
"Yang Ma" repeatedly took care of mobility
New latitude and longitude in the data map
Yan Pengcheng, director of the National Development and Reform Commission's National Economic Integration Department, emphasized at the press conference that the economic downturn in the first quarter was not a normal reflection of the fundamentals of China's economic development, but the result of sudden and serious incidents. In stabilizing the economic operation, Yan Pengcheng proposed a more proactive financial policy and a more flexible and appropriate monetary policy to hedge the impact of the epidemic and prevent short-term shocks from becoming trendy changes.
Since April, the People ’s Bank of China has pampered market liquidity through measures such as RRR cuts, reverse repurchase and medium-term lending facility (MLF) interest rates, continued targeted medium-term lending facility (TMLF), and lowered loan market quote rate (LPR). The total liquidity is reasonably sufficient. As of April 29, the People's Bank of China has suspended reverse repurchases for 21 consecutive working days.
On April 17, the Politburo of the Central Committee of the Communist Party of China convened a meeting and pointed out that it is necessary to exert greater macro-policy efforts to hedge the epidemic situation. A sound monetary policy should be more flexible and appropriate, using means such as RRR cuts, interest rate cuts, and re-loans to maintain reasonable and sufficient liquidity, guide the loan market interest rate to fall, and use funds to support the real economy, especially small and medium-sized enterprises.
CITIC Securities clearly stated that May is a big month of monetary + fiscal policy, and the currency will escort the fiscal. It is expected that the probability of a RRR cut and interest rate cut in May will be implemented. In addition, there is currently at least 30 basis points of downside in the overnight fund interest rate, and the long-term interest rate will also break the stalemate.
Lu Zheng, the chief economist of Industrial Bank and the chief economist of Huafu Securities, once analyzed that because China's stock market and bond market are all low valuations, including the Fed's global easing, once the international financial market panic slightly After the recovery, a considerable part of the water will flow to China, so China's policy should be calm and calm, without having to follow that closely. (Sino-Singapore Jingwei app)
All rights reserved by Sino-Singapore Jingwei, without written authorization, no unit or individual may reprint, extract and use in other ways.