Experts believe that the first quarter of China’s monetary policy is an important operating window period

2022-05-26 0 By

The Federal Reserve released the minutes of the January Federal Open Market Committee (FOMC) monetary policy meeting early on February 17, Beijing time.Fed officials said that while they still expected inflation to ease this year, they were ready to raise rates more quickly if necessary, according to the minutes.If inflation does not fall as expected, it would be appropriate for the FOMC to remove policy accommodation more quickly than expected.With regard to the tapering process, participants judged that the Federal Open Market Committee should complete its net asset purchases as soon as possible, given elevated inflationary pressures and the strength of the labor market.Most participants preferred to continue reducing asset purchases on the schedule announced in December, ending them by early March.However, several participants preferred to end asset purchases earlier to send a stronger signal that the Fed was committed to reducing inflation.On the balance sheet reduction plan, the minutes said the timing and pace of the Fed’s balance sheet reduction will depend on whether the economy achieves its goals of full employment and price stability.Shrinking the balance sheet refers to the direct recovery of the base money by directly selling the bonds held or stopping the reinvestment of maturing bonds, which is equivalent to raising interest rates in a disguised way.Fed officials think it may be appropriate to wait until the current rate cycle formally begins before starting to shrink the balance sheet.What is noteworthy is that the US Inflation data for January released by the US Department of Labor on February 10 local time showed that the US CPI rose 7.5% year-on-year in January, the largest year-on-year increase since February 1982.That has prompted some policymakers to support a bigger 50 basis point increase.However, the minutes showed that the Fed did not signal a 50 basis point rise in March, easing market concerns.Ping an securities research thinks, from the Angle of market traders, January meeting minutes is a “plain”, and the statement after the meeting, the reference to the current rate and shrinkage table will be faster than the previous round, the extent of future shrinkage table will be bigger, but a number of problems in the attention of the market, there is no response, such as whether to raise interest rates 50 basis points in March.At the same time, the research paper believes that the Impact of the Federal Reserve policy on China’s policy is relatively limited.”Given rising inflationary pressures in the US, the Fed will accelerate monetary tightening.The first quarter will become an important operating window for China’s monetary policy against the backdrop of divergence in the direction of Sino-US monetary policy.”Fan Ruoying, a researcher at the Bank of China Research Institute, told Securities Daily that China’s monetary policy should continue to be proactive and precise to stabilize the broader economy.Luo Zhiheng, chief economist and head of the Research institute of Yuekai Securities, said in an interview with Securities Daily that despite the increasing tightening expectations in the United States, China’s monetary policy remains “stable and self-centered”.At present, The Chinese economy is under the triple pressure of shrinking demand, supply shock and weakening expectations. Monetary policy will help stabilize growth.In the first quarter, domestic monetary policy easing may be further increased.(Reporter Liu Qi) Source: Securities Daily