It Is Also Useless For The Fed To Keep Interest Rates Unchanged And Improve The Economy.

At the height of the financial crisis, the Fed dropped its key policy rate to near zero at the end of 2008. After that interest rate, three rounds of quantitative easing policy were adopted. Federal Reserve It has expanded its balance sheet by more than 4 trillion and 500 billion dollars.

The Fed refuses to tighten its policy even though inflation remains below 2%, even though the unemployment rate is close to what the Fed believes is full employment. In decision making, Fed officials described the increase in employment as "stability" and described family spending as a "moderate increase". However, the Fed continued to focus on the growth of corporate investment, which fell in the third quarter. The wording of other terms has not changed much compared with the September statement.

The Federal Reserve has announced that interest rates will remain unchanged, while continuing to recognize the reasons for raising interest rates. In this meeting, only George and MST voted against the market. The market response to the meeting was mild. The spot gold and silver and the US index market changed little. At present, the federal funds interest rate futures show that the probability of raising interest rate in December is about 78%.

However, the official of the Federal Open Market Committee did not directly admit that it would raise interest rates at the December meeting, and the market strongly anticipated that the Federal Reserve would raise interest rates in December. In fact, the DOE in the Federal Open Market Committee won the majority vote.

FOMC acknowledged in the statement after the meeting. Economics The improvement has not yet been enough to generate austerity policies. After the meeting, the statement said, "the Committee believes that the reasons for raising the federal funds rate are increasing, but this meeting has decided to wait for further evidence that the economy is improving its goals." The wording of this meeting is similar to that of September. In the last statement, the reason for raising interest rates was increased, and this month the reason for raising interest rates continued to grow.

A notable change in the FOMC conference is that the committee's resolution has lost one objection. At the last FOMC meeting, Meister, George and Rosengren voted against it, indicating that they preferred the committee to raise interest rates. At this meeting, Rosengren joined the majority side and tended to maintain. interest rate Unchanged.

For the Fed meeting, few traders thought it would raise interest rates, but they thought the probability of raising interest rates in December was 73.6%. The US Federal Reserve raised interest rate targets in December 2015, raising interest rates for the first time since June 2006, but the Fed did not act in the following year.

FOMC also reiterated its last meeting's judgement of the risks facing the US economic outlook, that is, the "general balance". Before the resolution, the federal funds interest rate market showed that the probability of raising interest rates in December was 68.8% and 73% in March. After the resolution, the federal funds interest rate market showed that the probability of raising interest rates in December was 78% and 81.4% in March next year. The US dollar stabilized against the yen in the near 103.30.

According to the Wall Street journal, the FOMC statement said that inflation has increased since the beginning of the year, and its attitude towards inflation is more optimistic than the September meeting. This month, Fed officials also mentioned that inflation will rise to 2% in the medium term, which is more optimistic than what they said in September, "inflation will remain low in the near future". In addition, the FOMC statement also mentioned that the inflation compensation index based on the market has risen.

Avery Shenfeld, an economist at the Canadian Imperial Bank of Commerce, wrote in the report that the Fed's policy statement is just waiting for more evidence of some "economic progress". This is a slight but perhaps instructive change. There are only two members of the policy conference in the policy conference. The last meeting is the three place. It may be Rosengren, chairman of the Boston Federal Reserve, that the election is approaching and there will be no press conference after the conference. It is best to wait until December to raise interest rates, and continue to expect the US Federal Reserve to raise interest rates in December unless the economic outlook is significantly weakened or the financial market is in turmoil.