Xu Chenghong: Federal Reserve Minutes To Boost Interest Rate Or Boost US Dollar

　　 Federal Reserve Interest rate mechanism or point of view

The Federal Reserve will release the minutes of policy meeting on April May 22nd at two o'clock in Beijing on Thursday (May 22nd). For this summary market, it is believed that how to raise interest rates and raise interest rates under the background of the mild recovery of the US economy will be a problem before the Federal Reserve. This will also attract the attention of global investors once again. Any clues about the minutes may trigger speculation in the market.

The focus of the Fed's policy line is whether the Federal Reserve will maintain its quantitative easing plan and end QE later this year. Two is about the Fed's first increase in interest rates. In the first quarter of 2014, although the US dollar fell, the Fed still maintained its QE reduction.

Recent US economic data In the circumstances, the Fed's attitude towards QE reduction is unlikely to be shaken. In the last interest rate statement, the Fed indicated that the Federal Reserve would continue to shrink QE at a rate of $10 billion a month as the economy recovers and national consumption increases.

From the market report after the April resolution, Federal Reserve Board A meeting to discuss the medium-term monetary policy suggests that the Fed's exit strategy is about to be adjusted. The Fed may reveal clues to the mechanism of adjusting the benchmark interest rate in this summary. If this is the case, Yellen's failure to emerge from the stage of the new exit strategy is expected to unveil the mystery for the first time.

At the meeting, the Fed did not release the latest economic forecast report, but it is clear that the decision making level may have taken considerable time to discuss how to prevent the fed from modifying the future interest rate node, which is expected to have an unnecessary impact on the psychology of market investors, and what feedback this situation will get in the minutes will become the focus of attention from all walks of life.

When the Fed will raise interest rates, it may still be the biggest focus of this meeting. However, the Fed's plan to raise interest rates in the minutes is perhaps more noteworthy. The main task of Yellen, the Federal Reserve Chairman, is not to decide when to raise interest rates, but how to raise interest rates.

After taking office, Yellen stepped down the debt purchase plan step by step and insisted on maintaining a low interest rate environment for a long time. However, she also revised the forward-looking guidelines set out in the Bernanke era, abandoning the threshold of 6.5% unemployment rate as a rate hike, and turning a basket of employment data to assess the whole job market situation. The hawkish speech, which occasionally issued a six month interest rate increase, caused a great uproar in the market, but then restored the character of the doves.

At present, the adjustment of the benchmark interest rate mechanism is likely to be an important step in its new exit policy, which will be the first major reform made by the fed under its leadership. Some Federal Reserve officials have recently supported the adjustment of the benchmark interest rate mechanism.

As the new measure of the new chairman Yellen took office, the Fed chairman held a closed door meeting on the same day at the policy meeting. Therefore, the problems related to the counter repurchase measures may also be mentioned at the meeting, which may be mentioned in the minutes of the meeting.

In a recent speech, Yellen maintained a position that the interest rate would not be raised soon, and the bond market seemed to have accepted the signal. The US bond yield continued to decline. On Wednesday, Yellen will give another speech, and investors will remain concerned about her views on the economic outlook and monetary policy.

　　 Minutes of the meeting of the Bank of England

Beijing time 16:30 Wednesday, the Bank of England will announce the 7-8 May monetary policy committee meeting minutes. Until recently, expectations have also focused on the fact that the Bank of England will be the main central bank to tighten its policy. But Carney, governor of the central bank, stressed last week that the central bank is not in a hurry to raise interest rates despite the rapid economic recovery and the risk of bubbles rising in the housing market.

After last week's announcement of quarterly inflation report by the Bank of England, Carney, President of the Bank of England, said that the surge in house prices is the biggest threat to the British economy. If necessary, the Bank of England will take further steps. It can be said that the real estate market is currently a domestic factor most concerned by the Bank of England, and it will remain the focus even at the next meeting in June. Any warnings about risks in the UK housing market are likely to weigh against the pound.

The Bank of England announced at its May 8th meeting that the benchmark official bank interest rate would remain unchanged at a record low of 0.5%. The market had already expected that the conference would not adjust interest rates. Meanwhile, the Bank of England kept QE total at 375 billion pounds.

Britain has maintained its benchmark interest rate at a record low of 0.5% since 2009 to support the economy in the face of the global financial crisis.

Yesterday, the pound was helped to rise further than expected in April. The National Bureau of Statistics announced that in April, the consumer price index increased by 1.8% over the same period last year, up from 1.6% in March. Analysts surveyed by Reuters have forecast an increase of 1.7%.

The pound has been eye-catching against the US dollar in the past month, with most traders betting that a strong recovery in the UK economy will enable the central bank to raise interest rates ahead of time. The derivatives, based on Sterling overnight interbank interest rates, show that the central bank is expected to raise interest rates by 25 basis points in March next year, the result of last week is April next year.

British inflation is higher than expected and employment market conditions further improve, which means that the Bank of England can not keep interest rates low for a long time in the coming months. The market believes that today's release of the minutes of the Bank of England meeting may suppress the mood of sterling investors. The Bank of England's MPC expects to maintain a pigeon stance for some time to come. The Bank of England expects to raise interest rates after May 2015.