China-Singapore Jingwei Client, July 24, according to the Wall Street Journal Chinese website on the 24th, next week, Fed officials will discuss how to provide more stimulus to the economy, but they have already hinted that they are further understanding the impact of the new crown pneumonia epidemic on the US economy. Before, they can accept to maintain the existing policy unchanged.
New latitude and longitude in the data map
From July 28th to 29th, the Federal Reserve will hold a two-day policy meeting. According to reports, judging from the content of interviews and public statements, Fed officials’ discussions at the meeting may determine how quickly they can finalize any plans, which may be announced in September or at a meeting later this fall.
The report believes that Fed officials will face three considerations for how to provide more stimulus to the economy in the next step. The first is how long they plan to maintain interest rates close to zero; the second is whether they should adjust the composition of U.S. Treasury bonds and mortgage bond purchase operations and tilt toward longer maturity securities to strengthen support for the economy, just like the Federal Reserve In the same way as the actions taken after the 2008 financial crisis; the third is to complete the assessment of the Fed's long-term decision-making strategy in the past year.
The Beige Book released by the Federal Reserve on July 15 showed that US corporate activity rebounded in early July due to the relaxation of epidemic restrictions in various states. However, due to the recent rebound of the epidemic in many regions, employment prospects are uncertain.
At the same time, the epidemic relief measures including an unemployment benefit of $600 a week are about to expire, and Congress is currently negotiating a new round of relief plans. Many economists, including former Federal Reserve Chairman Bernanke and Yellen, said that if a new round of stimulus measures are not introduced in time, the United States may face permanent economic damage.
Following an emergency rate cut of 150 basis points in March of this year, the Federal Reserve temporarily "turned off". As of the early morning of June 11, Beijing time, the Fed has not adjusted interest rates for two consecutive times, maintaining the current interest rates of 0%-0.25% unchanged. According to the Sino-Singapore Jingwei client, the Fed has made 5 interest rate adjustments this year, including 2 cuts and 3 "stranded".
The market had previously speculated that the Fed might implement negative interest rates like some European countries. However, Fed Chairman Powell clearly responded that negative interest rates would not be considered. He said that the Federal Reserve will keep the federal funds rate at an ultra-low level close to zero until it is convinced that the economy has withstood the test of the new crown pneumonia epidemic. (Zhongxin Jingwei APP)