A "market curious" corner where you can understand the movements of financial markets.

In the week of the 13th, the focus of the market was, after all, the central banks holding a series of monetary policy-making meetings in Japan, the United States and Europe.

Of these, the US Fed has indicated that it will raise interest rates three times next year, clarifying its confrontation with inflation.

Is it more or less than 3 times?

What kind of impact will it have on Japan in the future?

(Yosuke Nakano, Reporter, Ministry of Economic Affairs)

The stance of monetary tightening shown at the FOMC (Federal Open Market Committee) of the Fed / Federal Reserve Board on December 15th.



He stated that he would end the quantitative easing policy three months ahead of schedule, end it in March next year, lift the real "zero interest rate", and raise interest rates three times next year.



This "showing an assumption" is a mysterious expression, but it is like voting for the policy interest rate that 18 members of the FOMC think is appropriate.

It is also called a dot chart because the "voted" policy rate is indicated by dots.



What is the result of the voting?


<2022>


・ One person expects one rate hike

・


5 people expects two times

・


10 people expects three times


There are two people


who do this.



By the way, since it is anonymous, it seems that economists are the subject of discussions such as "Who and who are these five dots?"



So what should we do with the pace of three times a year?



Let's compare it with the tapering after the Lehman shock.

After the Lehman shock, it has been more than a year from the end of the quantitative easing measures to the first rate hike, and the pace of rate hikes after that is slow.



On the other hand, this time, after the quantitative easing measures are completed, it is assumed that interest rates will be raised three times in the same year.



I think it's a fairly rapid gear change.

Behind the scenes is the Fed's sense of crisis over current inflation.



The US consumer price index for November rose 6.8% year-on-year.



It was the highest level in 39 years.



As the prices of various goods and services rose and consumers said that they couldn't buy Christmas gifts, they made clear their stance to fight inflation, which is also the mission of the central bank.



In addition, the Bank of England, the central bank of the United Kingdom, also decided on December 16 to raise the policy rate to 0.25%, contrary to market expectations.



In the United Kingdom, the infection with the new Corona Omicron strain has spread and it is necessary to support the economy, but the central bank has prioritized "inflation over Omicron".



Now, what kind of impact will this “rate hike rush” have on Japan?



The Bank of Japan will maintain large-scale easing at the monetary policy meeting on the 17th.



There is also a view that if the United States and other countries decide to raise interest rates next year, the dollar buying and yen selling will proceed due to the widening interest rate differential between Japan and the United States.



If that scenario is followed, import costs will increase due to the depreciation of the yen, increasing the number of companies whose profits will be squeezed, and the price increase of final products may make consumers' personal circumstances difficult.



In 2022, we are entering a year when we are a little worried about what will happen to our work and life.

Scheduled to pay attention

The focus will be on the Consumer Confidence Index of the Conference Board in the United States on the 23rd.

Markets are likely to draw attention to how consumer sentiment will change as inflation accelerates.



The 24th is Christmas Eve.

The stock market in New York will be closed.