<Anchor> This is a
friendly economic time. Today (30th) I will be with reporter Kim Hye-min. Last weekend, I saw a lot of articles about the 'Jackson Hole Meeting' in the US. First, let me explain what this Jackson Hole meeting is.
<Reporter>
Today, as the name of the corner, kindly explain about the Jackson Hole meeting and tapering. The Jackson Hole meeting was held last week. On Friday night, Federal Reserve Chairman Jerome Powell spoke here.
The Federal Reserve is the central banking system of the United States, which determines monetary and financial policies and manages and oversees banks. It's not exactly the same, but to explain it a little more simply, it is an institution that does a similar job to the Bank of Korea in Korea.
In addition, the Jackson Hole Meeting is an economic and monetary policy discussion held in the United States in August every year, attended by central bank governors and economists of major countries, that is, key figures influencing the global economy.
Chairman Powell's speech was scheduled for this forum, and there was a lot of speculation that a 'tapering' plan would be announced here, so there was a lot of interest.
<Anchor>
After all, it was because of interest in how the American business community related to tapering would judge it. But within this year, I'm going to taper. Did the chairman officially say this?
<Reporter>
That's right. The dictionary meaning of 'tapering' is "to taper at the end".In economic terms, it is used in the sense of recovering money that has been loosed in the market.
Last year, the Federal Reserve cut interest rates to zero. It has provided liquidity to the market by purchasing government bonds every month.
After that, when prices and employment levels rise to a certain extent, they taper. Raising interest rates when the target is reached has been considered as the next step.
There have been many observations as to whether this tapering is done and when the 'time' is, but this time, Chairman Powell officially announced that he could begin the tapering process within this year. Let's hear it for yourself.
[Jerome Powell/Federal Reserve Chairman: If the economy develops as broadly as expected, I think it may be appropriate to start reducing the pace of asset purchases during the year.]
However,
he said
, even if the tapering starts, this is not a signal that the rate will be raised. He said that interest rate hikes will be judged on a more stringent basis.
<Anchor> In the
first half of the year, when the US price went up for a while, the tapering will start soon. The stock market crashed when this story came out. But this time the US stock market rose, on the contrary.
<Reporter>
Yes. There's a reason why people are so interested in this period of tapering, because it has had a huge impact on the stock market in the past.
In 2013, when then-Chairman Ben Bernanke predicted a tapering, a lot of investment funds in emerging markets went out. Stock prices also plummeted.
The Korean KOSPI index also experienced a plunge from 2001 to 1,800 in one month. But this time it was a little different.
Uncertainty is what financial markets hate the most. However, with Chairman Powell's remarks, it was confirmed that the tapering would start within this year, and some of this uncertainty was resolved.
Conversely, concerns about austerity caused by interest rate hikes have been resolved. Because of this, the US stock market hit an all-time high. It also seems to have an impact on domestic stocks today to some extent.
<Anchor> That's
right. So, this seems to be a story that the resolution of uncertainty had a positive effect on the stock market. If you look at related articles, for example, Chairman Powell is a dove, or the Fed has a lot of hawks, and there are many stories like this. What does this dove, hawk mean? Please explain.
<Reporter> According
to the characteristics of birds, it is divided into two types: hawks and doves. The hawks are people with radical and hard-line tendencies, and the doves are people who are moderately pursuing policies.
From an economic point of view, hawks are a little different. They value price stability, so they pursue a austerity policy that collects the currency by raising the base rate.
On the other hand, the doves prioritize economic growth and advocate quantitative easing by lowering the base rate to release money into the market.
This time, Chairman Powell was evaluated for continuing a dovish move while foretelling a tapering but blocking expectations for an interest rate hike.
However, there are quite a few hawkish insiders inside the Fed, arguing that we should start tapering as soon as possible and raise rates.
There is also a diagnosis that Fed members have a growing divergence of opinion over monetary tightening.
As Fed members lead the global financial market, paying attention to what they will do in the future seems to be able to predict the impact on the domestic economy to some extent.