Foreign media reports, Morgan Stanley chief economist Ellen Zentener said the U.S. Federal Reserve on Wednesday (6) released the minutes of the monetary policy meeting in December last year, the word “Taper (tapering)”, for the first time since the Board Chairman Powell took office, which means that the Board has begun to imagine how to gradually reduce quantitative easing (QE).
In 2013 to 2014, the market was once because of the “scaling back panic” and caused significant volatility. As investors expect the Federal Reserve Board will tighten QE, a large number of funds withdrawn from emerging markets, back to the United States, causing many emerging market countries violent turmoil, currency re-depreciation, and worry about when the Federal Reserve Board to reduce the size of QE.
Zentener pointed out that, according to the minutes of the meeting, the Federal Reserve officials on economic growth and inflation in the medium term prospects, holding a more optimistic view, I believe that although officials believe that the current monetary policy is appropriate, but has begun to imagine when and how to start gradually reducing the scale of asset purchases.
Zentener expects that stimulative fiscal action and vaccine allocation will drive U.S. GDP growth of 6% in the fourth quarter of this year, well above the general market expectations. He estimated that the Federal Reserve may start to consider related discussions in the second half of the year, and announce a gradual reduction in bond purchases at the December meeting, and start action in January 2022.
In fact, a previous attempt by the Fed to phase out without triggering a market crash resulted in disaster in 2013, with bond yields falling back 150 basis points in a matter of weeks. Currently, the bureau’s balance sheet has nearly tripled in size, meaning that it will clearly be a very difficult task for the Fed to make an orderly exit.
Recent Comments