12 may end the Fed's routine monetary policy meeting, the last two weeks of global compact yixi climax. It is not difficult to see that in most developed economies interest has hit bottom, but the prospect of economic recovery is still uncertain situations, maintaining a loose monetary policy become the main theme of this phase.
Enter the 8 month less than two weeks, has there Australia, United Kingdom, the euro area, Japan, Korea and Russia, Indonesia, etc. nearly ten economies of Central Bank held a regular meeting. Almost all developed countries have opted to maintain interest rates at historically low levels, while continuing to pursue quantitative easing monetary policy.
The number of typical representatives of course to the Fed. In the last months of Congressional hearings, Ben Bernanke has made it clear that the current policy is to stimulate the growth of gravity still, so interest rates remain at low levels in time will be longer than expected. Currently, the industry generally expect that the Fed was probably next year and will start raising interest.
In a few more severe economic situation, the authorities of the country even further expanded the scale of quantitative easing. Such as the United Kingdom's Central Bank last week announced unexpectedly existing bonds acquisition increased the size of 500 million pounds.
Compared to the developed economies, boot cut interest rates later of many developing countries still hold high interest rate. Indonesia, Russia, Romania and the Czech Republic and other countries over the past few days have announced cuts benchmark interest rate.
However, economists have also noted that, compared to the first half of the next few months, the global economy bottoming trend will become more apparent. With the continued rise in asset prices, monetary authorities have also had to start will be the future of inflation and inflation expectations into account. The developed economies on the whole, although in the short term monetary authorities will still be capitalised, but the next policy approach has obvious bias austerity.
In fact, in order to suppress the market many of inflation expectations, the Bank has issued the "exit strategy" a clear signal. For example, previously have been choosing words "exit" the fed, the last couple of months has repeatedly stated its withdrawal from the quantitative easing policy, Ben Bernanke last month or even lists the five main exit. The interest rate, if not immediately, it is expected that quantified reduction will be gradually loose scale, such as government bonds.
In Australia and Korea, etc., is expected to be relatively early recovery of the economy, the Administration has opened a topic of interest. Some analysts predict that the earliest possible start at the end of this year the interest rate.
At the present stage of deflation is not a typical phenomenon
Analysts noted that the major central banks in the world from the recently passed out of the information, in the preliminary signs of the economy, but continued to stabilise recovery prospects remain unknown context, monetary authorities have taken a wait-and-see policy of maintaining the status quo. However, similar to Japan's deflationary pressure was not a typical phenomenon, for the majority of central banks, the next biggest threat comes from increasing inflation expectations.
And worried about deflation increase of Japan, the fed and other central banks now face a greater threat of inflation pressures from the future: If the authorities do not start in a timely manner, the excess withdrawal policy mobility from economies system pumped out, malignant inflation may.
Local time 12, end the meeting, the Fed may reaffirm their commitment to the next exit strategy planning, to discourage market on inflation worries. Many analysts also estimate that the Central Bank at this meeting may decide to terminate scheduled at the end of September amounted to $ 300 billion of Treasury bonds acquisition plan.
But as this crisis to avoid recession in a handful of developed economies, Australia is also one of the last week officially transferred to the neutral monetary policy that no longer represents a further interest rate cuts are coming "space". Economists generally expected, the earliest in the year, Australia's central bank interest rate will be started. O Treasurer Swan Tuesday, as the global economic recovery from the recession, Australia will eventually join the global rise in interest rates.
China announced yesterday are still negative CPI data, the July CPI up China down 1.8% again. Nomura Securities, spring China Economist said yesterday that, although there are indications that the strong economic recovery and liquidity conditions extremely lax, but prolonged deflation and lower inflation expectations to reduce the possibility of the policy constraints.
However, the body seemed to not worried that China has the risk of deflation. Nomura's report states that since the Ministry of commerce monitors and published some price in July last year, and peaked during the last three months begin blinking-ring than rising trend, the Bank believes that China's PPI may have hit bottom in July.
Standard Chartered Bank yesterday's report noted that the CPI is a lagging indicator, if you press the ring ratio calculation, prices start from 3 month to have stopped declining. The month of July, the CPI and PPI has been equaled, expected CPI increases year-over-year in November and will return to a positive number. Overall, inflation expectations have increased.
Even in Japan, with a series of policy measures in effect gradually, Japan's economy has also begun there are signs of improvement. Japan Cabinet Office 11, published reports indicate that benefited authorities launched 25 trillion yen (approximately 2620 billion) economic stimulus, Japan's consumer confidence in the month of June for the first seven months of climbed.
Analysts expected next week in an official report will show, Japan economy probably as at June 30, second-quarter growth 3.9%, thus concluded four consecutive quarters of contraction.
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