The Federal Reserve'S Monetary Policy Is Difficult To Stabilize.

The Fed's policy is actually a model of the old order and old rules. Under the new circumstances, it is impossible to expect the us one to guide the world's healthy and stable development.

Under the background of global integration and the rapid development of the Internet, only the developed countries and the emerging countries jointly negotiate and manage the new order and new rules of the world economy is the hope of the world economy in the future.

According to media statistics, when Yellen stood on the stage in September 18th, she had not delivered speeches in public for 63 days, and this was "deliberate silence".

In the middle of the global market, New York Fed chairman Dudley (BillDudley) and fed vice chairman Fisher (StanleyFischer) have made public statements to guide expectations.

However, Yellen seems to have disappeared. She even missed the Jackson / Holzer global central bank [micro-blog] annual meeting again. The reason may also be to avoid the market being affected by its remarks.

Is it really a big problem in the Chinese economy? Or is it a matter of fact? Before long, Premier Li Keqiang said at the Dalian summer Davos forum that China is one of the sources of power for world economic growth. Now the trend of China's economy is to slow down, stabilize and stabilize.

First, China has huge economic potential and strong internal resilience; two, structural reform is releasing reform dividends; the three is "double creation", that is, the momentum of mass entrepreneurship and innovation, and has become a strong driving force for development.

It can be seen that China's economic fluctuation is not the root cause of the world economy's "headwinds".

Although emerging economies, represented by China, face varying degrees of difficulty, the overall trend of development is still promising and will continue to contribute to the development of the world economy.

So the root of the problem is not here.

So what is the root cause of the challenge of the stability of the Fed's monetary policy? As we all know, since the financial crisis, the global economic order has clearly entered a new era of structural reshuffle and reshuffle.

The restructuring of world economic rules will be an important feature of this era.

Examining the unfairness of the existing international economic order and the injustice of the rulemaking authority are the first to bear the brunt.

The current international economic order and related rules came into being in the early days after World War II, and were dominated by western countries such as the United States.

Now that the end of World War II has been 70 years, the global economy has undergone tremendous changes.

Emerging economies such as China have become an important force in the world economy and have a decisive impact.

This made the old order which completely ignored the interests of the developing countries after the war, and the way of rule making made by several big powers in the United States and Europe was divorced from reality.

Coupled with the inherent contradictions between the old order and the old rules, the financial crisis and economic crisis have taken place. The development of the world economy has been difficult. The rules of the old order have been widely criticized and urgently needed to be reformed.

The Fed's policy is actually a model of the old order and old rules. Under the new circumstances, it is impossible to expect the us one to guide the world's healthy and stable development.

Historical data show that Yellen is actually a supporter of QE.

Her academic research focuses on the causes and costs of unemployment. She has always believed that inflation is not likely to happen in a weak economy, and advocates that the Federal Reserve take effective measures to deal with high unemployment.

If Greenspan, the former chairman of the Federal Reserve, has the merit of "raising the inflation tiger for the 17 time", Bernanke's meritorious service is to start the three rounds of quantitative easing (QE) and help the us get rid of the financial crisis. Then Yellen's action is to raise interest rates and help the US dollar go strong again.

This is Yellen's mission.

Under the dual incentive of the US economic cycle and the US Federal Reserve's lead in changing the ultra loose monetary orientation, the US dollar strength has become the biggest market theme in the near future.

The unavoidable fact is that because of the position of the US dollar as the world's major reserve currency, the global monetary policy is the monetary policy of the United States in the final analysis.

As long as this situation does not change for a day, the huge impact of the Fed's monetary policy on the world economy will not change.

At present, the Fed's assets are $4 trillion and 500 billion, 5 times the crisis before the crisis, MBS and treasury bonds account for more than 90%, and debt is mainly over $2 trillion and 700 billion in excess reserves.

In 2014, the US withdrew from quantitative easing (QE), opening up a new round of global monetary cycles. The global environment of monetary easing and capital adequacy has fundamentally reversed.

This is a structural and cyclical impact on the global monetary system, which will normally persist for several years, which will make countries face the risk of US dollar liquidity.

The "total valve" of the US dollar is in the hands of the Federal Reserve. After the gradual easing of quantitative easing in 2014, the global monetary base decreased and the "dollar pool" level dropped.

This has caused massive capital reflux to other countries, especially the emerging economies, bringing about financial risks and economic difficulties such as the depreciation of the local currency and the increase of the debt burden.

Developing countries have little say in global monetary policy and liquidity. They can only suffer from suffering and suffering.

According to the International Finance Association (IIF), in 2014, outflow of funds from emerging markets was about US $1 trillion.

Moreover, the trend of capital outflow in emerging economies is increasing despite the expected impact of the appreciation of the US dollar and the Fed's rate hike.

According to the latest statistics, the outflow of equity funds in emerging markets has reached the highest level in recent months, and the outflow of emerging market bond funds has reached the highest level since the beginning of 2014.

Capital outflows, reflux plus depreciation expectations continue to intensify, and asset market and exchange rate pressures in emerging economies continue to increase.

According to the data of the BIS, in 2014, the nominal effective exchange rate of the US dollar rose to 8.35% of the package currencies, and the appreciation rate ranked first in the 61 main currencies of the world. In the same period, the nominal effective exchange rate of the renminbi rose by 6.41%, ranking fourth, behind the Venezuela and Saudi Arabia's fixed exchange rate pegged to the US dollar, and the RMB even slightly exceeded the Hong Kong dollar linked to the exchange rate system.

In 2015, this situation was further fermented. In 1~7 months, the RMB efficiency increased by 4.88%, and the appreciation rate in the 61 main currencies ranked ninth.

For a large open economy like China, such a large passive appreciation of the effective exchange rate can be regarded as a distortion of exchange rate to a certain extent.

It does not reflect the changes of real factors, nor does it meet the objective needs of market mechanism to repair the real economy spontaneously.

Distortions need to be corrected, and the depreciation of the RMB against the US dollar is expected to form and strengthen.

Without any warning, China resolutely took action.

First, we resolutely cut the link between RMB and the US dollar passive appreciation.

In August 11th, the people's Bank of China announced that the central parity mechanism of RMB should be improved so that the market could play a leading role in the formation of the middle price. In the next 3 days, the RMB had depreciated more than 4%, and the devaluation expectation could be released once and for all.

Two, in view of the widespread expectation of devaluation of the RMB in the international community, China has further opened the offshore renminbi market, so that the devaluation of the congestion in the offshore renminbi market will be released in a wider space.

To this end, the central bank issued the notice of the people's Bank of China [micro-blog] on expanding the scope of Renminbi purchase and sale business, expanding the scope of Renminbi purchase and sale business to RMB settlement requirements under direct investment, and trading varieties include spot, forward and swap.

Three, because expectations are volatile, only absolute low interest rates will generate interest rate expectations, which will lead to appreciation expectations (as in the US).

In August 25th, the expected monetary policy adjustment was carried out. From the perspective of exchange rate, the expected rate cut action actually played the role of actively releasing the potential of devaluation, and in the future, if interest rates dropped, the devaluation expectation would also become a strong end.

China's action has been widely understood, but at the same time, the West has also misunderstood the Chinese economy, so there is indeed a global earthquake.

This incident became the important background of the September meeting of the Federal Reserve.

The September 17th meeting of the Federal Reserve has decided to maintain interest rates unchanged and keep them at the same level since December 2008.

The Fed said 9 members of the Federal Open Market Committee voted to keep the benchmark federal funds rate at the 0~0.25% level.

Geoffrey, member of the Committee.

Lac is the only opposition who supports a 0.25 percentage point increase in interest rates.

The Fed has made it clear that worries about global economic strength have affected its decision.

The committee said in a statement: "the latest developments in the global economy and finance are likely to be slightly suppressed recently.

And there may be downward pressure on inflation in the short term. "

Signs of slowing economic growth and turmoil in the stock market have led investors to worry about the prospects for us economic growth.

Yellen, chairman of the Federal Reserve, said at a press conference: "we have long anticipated that the trend of China's economic growth will slow down over time, and this trend is not surprising.

The question now is whether there will be a more sudden deceleration than most analysts expect.

In an article published on the 19 th issue of the Financial Times website in September, entitled "clues to China's search for the fed to raise interest rates", it said: "the two largest economies in the world have formed a symbiotic relationship again.

After months of speculation, the Fed decided not to raise interest rates this week to maintain close to zero interest rates for nearly 7 years.

The Fed obviously wants to raise interest rates.

The unemployment rate in the United States continues to decrease. "

Obviously, the policy direction of the United States and China is different here. The United States tends to tighten money. China tends to further relax because it needs more time to adjust the financial system, stabilize the RMB exchange rate and promote its growth.

Considering the impact of Chinese factors on the US economy, it worried that the ECB in 2011 would have to raise interest rates at a time when the economy was not stable. Finally, it had to cut interest rates sharply to the negative interest rate and even start the lesson of QE.

The Fed chose not to raise interest rates, and unexpectedly, the stock market closed down slightly.

The Fed's decision not to raise interest rates may deepen investors' concerns about the global economic situation and question the Fed's ability to cope with the global economic weakness.