Waiting for the Fed meeting specified direction

Waiting for the Fed meeting specified direction

This week's market focus oligomerization fed meetings become eye-catching yixi focus. In the high unemployment and low inflation pressures market generally forecast Conference US Federal Reserve will announce the second round of the quantitative easing policy, or in the next few months to purchase at least $ 500 billion public debt in order to stimulate the economy. But the view was expressed that the Fed will not disclose a certain number, you may maintain a policy of openness, as each month to purchase approximately $ 100 billion of debt, when aborting the month by month, as the case may be. Whereas the European Central Bank, the United Kingdom's Central Bank, Bank of Japan and Australia's Central Bank, and other major national central bank will be held this week, yixi meeting of all parties in the eyes and make sense of the Fed's every move.

According to market speculation that the Fed is likely to be in the 3 day policy meeting decided to restart the bond purchase programme to boost economic growth, although according to the survey, United States Pengboshe 2011 year second quarter economic growth is most likely from the third quarter of 2010 and 2% increase to 2.6%. Interview of the 56 economists 29 were considered that the Fed's assets purchase scale may be 5,000 billion or more.

Expand the Fed's assets means that Ben Bernanke (BenS.Bernanke) might be heavy going 03, 04 years old, when he and other central bankers will interest rates remain at record low inflation exceeds estimates. California State University JamesD.Hamilton that Ben Bernanke may lead to inflation is expected to grow too quickly, thereby raising money and bond markets.

If the Fed's announcement of quantitative easing scale higher than the market expected in the short term US dollar against other currencies will be depreciated, and eventually may lead to other central banks to follow, a major currency devaluation, the final event of global inflation.

Hedge Fund FleckensteinCapital CEO flecken Sten indicated that the Fed is basically a "inflation engine", its impossible to rate long stay on the current level, once the interest rates start to rise, rise drastically. It should be noted that the United States Treasury Department last week for the first time, to negative interest rates successfully issue 5-year inflation hedge bonds. Choose the Fed will soon launch a new round of quantitative easing in the week before issuing this debt, United States authorities to test water will speak for themselves. While this debt are sought after in the market are, in General, the expected inflation rate in the United States will increase in the future.

Pacific investment management company (PIMCO) Chief Investment Officer of Grosse 2, said that if the Fed once again quantitative easing measures implemented over the next few years the devaluation of the dollar will be 20%. But to some extent, so that the dollar may be the United States Department of the Treasury and the Fed are pleased to see the situation.

All dynamic

With the Fed's meeting to be held, States will take the appropriate measures. It is expected that Japan's Central Bank might take further measures to rescue the economy, the United Kingdom's Central Bank likely to open the door for further assistance. Even the European Central Bank may also be because the euro is high and sharp changes in policies. Prior to that, the United Kingdom central bankers Kinen (MervynKing) has indicated that, since the Government is implementing the largest since the second world war austerity measures, he will eventually support the purchase of more bonds to support economic recovery in the United Kingdom.

Link to financial analysts believe that a global relaxed door open, whether to the global economic recovery and bring new dynamism? whether to bring a new round of inflation? everything just watching and expression of speculation, the final result are waiting for the Fed meeting for market direction.