Loose and tight: U.S. and European policies toward food for thought on.

<P> Tuesday, the Fed's September interest-rate meeting showed, even though differences still within the Fed, but most officials agree that further steps be taken to deal with the U.S. economy is currently facing the coexistence of low inflation and high unemployment dilemma .thus confirming the market for the Federal Reserve may soon start a new round of quantitative easing is expected. .Before that, has been approved dragged its feet on the Bank of Japan unexpectedly cut interest rates earlier this month and announced the launch of the so-called "full monetary easing." .And deflation risks facing the U.S. and Japan in contrast, the European Central Bank need to focus on the price level at this time was "slightly biased upward" trend, which led to some research to make the European Central Bank may raise interest rates earlier than expected speculation. .Loose and tight at the crossroads, the three central bank policy choices concern. .</ P> <P> Fed: New round of quantitative easing Troops </ P> <P> latest meeting minutes showed that Fed officials in September 21's meeting on interest rates, the focus is still a problem to increase .long-term bonds to buy down the possibility of borrowing costs. .Part of the officials that "unless the pace of recovery", or the Fed should consider taking action as soon as possible, the other officials that "only in the prospects of further deterioration and materially increased risk of deflation, when" it should take action. .It should be noted that the recent U.S. economic data remained weak, especially in the trend rate of unemployment and inflation pessimism, to a certain extent, seems to play down the real differences between the two camps, it appears a few minutes of decision-makers "feel .Shortly after the policy may be suitable for further relaxation "of the word. .</ P> <P> According to overseas media reports, most Wall Street analysts believe the Fed will restart in early November the Treasury purchase plan. .At the end of March this year the first round of the asset purchase plan, the Fed bought a total of 1.7 trillion of mortgage-backed securities and long-term government bonds, driving down the loan market to help the long-term interest rates. .13 Nomura International in a report distributed to journalists predicted a new round of the Fed's policy of quantitative easing will total 600 billion U.S. dollars to purchase securities (buying 3 times, each 200 billion U.S. dollars), its securities .The peak level of the portfolio increased to 2.64 trillion U.S. dollars. ."We believe that risks are tilted in the (Fed) to take stronger action." The report said. .</ P> <P> As to whether a new round of power of representation of quantitative easing, which is currently the supporters and opponents of a key point of disagreement. .Nomura International believes that, although the direction of Fed policy of quantitative easing plausible, but its impact strength will be very small. .According to its estimates, in the last asset purchase program, the Federal Reserve to buy 100 billion U.S. dollars per stock to the impact of rate of return is only about 7 basis points. .Taking into account the second round of the diminishing effects of quantitative easing, the Fed should intervene in the market significantly, you need to purchase very large-scale securities. .Analysts believe that, indeed, as expected if the Fed will soon release the quantitative easing policy of the gate, then in 2013 began to raise interest rates may be very low. .Tightening may be expected to be from 2012, mainly to adjust the form of asset sales. .</ P> <P> BOJ: policy actions fully relaxed strongly </ P> <P> than in the United States, Japan, in addition to endure the torment of the economic downturn and deflation in the shadow of the torture, the threat posed to yen appreciation .more direct and sharp. .This has to a certain extent, explains why the Bank of Japan has been shot in the conservative 5th of this month the first step, not only the objectives of the policy interest rate from 0.1% to 0.0% to 0.1% range and is committed to maintaining "real zero interest rate policy" .Price is expected to stabilize until the central bank to determine, but declared a "full monetary easing measures", including the establishment of the scale of 5 trillion yen (about 60 billion U.S. dollars) in funding pool, to buy government bonds, short-term government securities, commercial paper and corporate bonds, .and a size of about 30 trillion yen of assets acceptable as collateral for the loan scheme. .13, Bank of Japan Masaaki Shirakawa-line speech in Congress once again hinted that if economic and financial situation deteriorated, the Bank of Japan may expand the original 5 trillion yen in financial assets purchase program. .He said: "If the future is indeed necessary to determine, through further funding to adjust monetary policy is likely to be a policy option." </ P> <P> Although many analysts had even suggested that the Bank of Japan are expected to launch a series of .lenient measures, but Masaaki Shirakawa throw "full loose" framework is still a lot of people by surprise. .Of particular note is part of the plan as an asset purchase, the Bank of Japan is seeking government approval to buy up to 5,000 billion yen exchange traded fund (ETF) and the Japanese real estate investment trusts (J-RET). .Through these initiatives, the Bank of Japan aims to "encourage all the decline in risk premium in order to further strengthen the monetary easing." .Nomura International analysts believe the central bank will buy the stock and real estate as a matter of policy actions to ease monetary conditions of considerable importance, once shot, the Bank of Japan will be no turning back. .</ P> <P> However, analysts also said the agency, because after the Bank of Japan has repeatedly disappointed the market and the observer, at first announced dramatic measures, but then was too cautious in the implementation process, the scale is too .small or counterproductive, so overwhelmed by "full loose" good faith remains to be seen. .More analysts argued that even if the Bank of Japan has taken the unusual action, may not be sufficient to reverse the yen's rally is expected early next year, the Bank of Japan may have to further relax policies, including the purchase of a substantial increase in asset size ( .through the creation of excess reserves to provide funds) and increase the proportion of risk assets. .</ P> <P> European Central Bank: exit is still the main theme </ P> <P> the face of American and Japanese central bank's monetary policy of quantitative easing has been or is about to return to orbit, and the Bank of England recently revealed to follow the Italian, European .meaning the central bank's tightening has seen shaken. .The Bank president Jean-Claude Trichet said the 12, without prior commitment on the basis of existing policies to take further unconventional monetary policy measures, and stressed the importance of the European Central Bank long term credit. .</ P> <P> held on 7th of this month's interest-rate meeting, the European Central Bank's press conference, as expected, bland, but compared to other central banks around the corner, this placid hand, concern .. .Jean-Claude Trichet at the ECB reiterated the economic recovery continue to expect slower growth, but "the basic trend remains positive." .Earlier, the European Central Bank has just raised the region's economic growth forecast for the next two years expected growth rates were 1.6% and 1.4%. .Inflation, the ECB statement this month that price trends once again facing the prospect of risk "a little upward bias", and 2% inflation target range is expected to have touched the ceiling. .Analysts expect that in this case, the European Central Bank will continue as planned the gradual recovery of excess liquidity, Nomura International expects that the ECB may need to take the lead in the April 2011 start raising interest rates. .</ P> <P> recent comments from ECB officials also confirmed this speculation. .12, European Central Bank is considered the most influential decision-making members of the Council of the European Central Bank, Bundesbank President Axel Weber said the ECB's bond purchase plan does not produce results, they should immediately withdraw from the scheme, and called on the European Central Bank as soon as possible .measures to reduce other forms of support, and not to delay raising interest rates. .</ P>.