(Financial World) There are new tricks for the Fed to adjust its monetary policy framework to "release water"?

　　China News Service, Beijing, September 1 (Reporter Wang Enbo) As the Federal Reserve officially introduced the average inflation target into its monetary strategy, the US monetary policy framework ushered in a major adjustment.

　　The Federal Reserve recently announced an update to its long-term goals and monetary policy strategy statement, and it will seek to achieve a long-term goal of an average inflation rate of 2%.

Previously, the relevant policy statement was committed to achieving inflation near the "symmetrical 2% target."

　　The two main goals of the Fed are full employment and price stability.

After updating the expression of the long-term inflation rate target, the Fed will play down its employment concerns that low unemployment may lead to excessive inflation; in terms of prices, it will adopt appropriate monetary policies when the inflation rate continues to fall below 2%, and tolerate the inflation rate for a period of time. Over 2% to achieve the long-term goal of 2% average inflation.

　　Zhao Xueqing, a researcher at the Bank of China Research Institute, pointed out that under the new framework, the Fed has broken the long-term ceiling control on the inflation rate, trying to maximize the labor market and employment levels.

In the long run, the Fed's "easy" on inflation and employment indicators at the same time, and higher priority of employment improvement, means that the low interest rate monetary policy environment will continue to exist for a long time without substantial changes in the economic situation.

　　According to Tao Dong, the managing director of Credit Suisse, the Fed tried to extend the ultra-loose monetary policy as much as possible by modifying the rules, in order to pull the US economy out of the quagmire.

He believes that the current amount of quantitative easing in the United States is staggering, and the marginal efficiency of interest rate leverage is very low. The Fed hopes to stimulate the capital market and stimulate capital investment by strengthening the funds' expectations for the intensity and length of quantitative easing.

　　However, although this adjustment is regarded as the most significant change in the Fed's monetary policy framework in more than a decade, its decision did not surprise the market.

　　The Research Department of CICC pointed out that the Fed has faced two challenges in the past 10 years. One is that inflation has continued to be low, which has weakened the Fed’s policy interest rate hike space, which also limits the Fed’s room to cut interest rates in response to recessions; the other is the delay in inflation. Failure to reach the 2% target may result in market inflation expectations not being well anchored, and there are expected downside risks.

　　In response to the challenge, the Federal Reserve announced as early as 2018 that it would start a review of its policy framework to examine whether monetary policy strategies, tools, and communication methods are sufficient to achieve the dual goals of ensuring price stability and full employment granted by Congress.

Therefore, this adjustment is generally in line with market expectations, and the possibility of average inflation has been studied and discussed by the market.

　　However, whether the above adjustments can achieve the expected substantive effects remains a question mark.

　　Zhao Xueqing said that although the average inflation target framework helps anchor inflation expectations at a level closer to 2%, the future "balance" will be used to compensate for the past "gap", so as to achieve the effect of lowering real interest rates without cutting interest rates. , But if the market follows the same logic and uses the actual interest rate as an indicator to judge the tightness of monetary policy, then this policy measure may also fail.

　　"I think this is a policy that only takes care of the present." Jeffrey Sachs, professor of economics at Columbia University and director of the Center for Sustainable Development, questioned that the Federal Reserve signaled to increase the money supply and substantially increase liquidity, but the specific economics used It is not clear what the theory or logic is.

On the macro level, its latest policy will not have a substantial impact on the US economy.

　　Talking about the impact of the Fed's move on China, Guan Tao, chief economist of Bank of China Securities, believes that the long-term extension of the zero interest rate and low interest rate policy in the United States has advantages and disadvantages for China.

On the one hand, the loose monetary environment in major global economies has created good external conditions for China’s macro policies and the implementation of the “six guarantees and six stability”; on the other hand, it also highlights the value of RMB financial asset allocation, which is conducive to attracting capital inflows and promoting capital markets development of.

　　However, Guan Tao reminded that China should also deal with the following three major problems: First, the RMB exchange rate may face the challenge of appreciation pressure again; second, in the global low interest rate environment, we must pay attention to whether the large inflow of foreign capital will bring about it. Asset bubbles; third, inflation control faces certain challenges.

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