The Fed's monetary policy faces economic difficulties after spreading all over the place.

Contents

In the previous article "Post-Post-Pandemic Fed's Monetary Policy Logic" discussed in this series, we discussed the main goal of Fed fiscal policy: to promote maximum performance and mortgage security - the uncertainty and the narrowness of this amount. He spoke in law. We review current US Treasury yields, real interest rates, the consumer price index (CPI, lagging indicator), inflation expectations (performance indicators), performance data and data. other key highlights. Based on new data released in December 2021. Future Discuss the challenges the Federal Reserve faces in setting monetary policy at any given time.

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The latest Consumer Price Index (CPI) data released by the United States Bureau of Labor Statistics on December 10, as shown below, the overall CPI growth for the urban population up to the end of November 2021 is as follows: first half of 1982 at 6.8%. It's the biggest thing since.

Historical national inflation rate according to the CPI index

Capital markets grew more frustrated with the recent release of CPI data, with analysts and Wall Street analysts expressing concern over the Fed's policy to comply with the aftermath of the US economic recovery this year. EI-Erian, Dean of Queen's College, University of Cambridge, said: "The current rate hike is likely to be 'volatile' and is one of the most volatile calculations in the world. The history of the fed." , which can lead to bad decisions. 3. Powell, the current Fed Chairman and one of the most influential figures in the "currency exchange" debate, said "after criticism and criticism from the US Congress Assembly in November." It's time to dump her." There was a meeting at the Fed. paragraph 4.

It is not true that 1982 goes back in history, exactly 10 years after the worst crisis in the United States since the split of the American dollar and gold in the 1970s. This year marks the beginning of a period bold growth in anti-inflationary interest rates. Because he knew his metal would withstand the ups and downs of high market and White House interest rates. Although he laid a solid foundation for the stable development of the US economy over the next 20 years, he served as Fed Chairman only twice. In 2000, he objectively brought to the Internet. - Choose 4 consecutive years, the maximum period of 16 years ends. The comparison also highlights the dangers of long-term, uncontrolled "macro" markets and increased adherence to short-term, "micro" needs, such as speculative thinking, trading capital, and White House political needs.

Fed fiscal policy falls

The most important objective of accommodative monetary policy is to stimulate the economy by capitalizing on the capital market, which became the real policy after the separation from the United States. The US dollar traded against gold and all exchange rates against US currency. A tool to strengthen the Federal Reserve.

Compliance with this tax policy can be broken down into several levels of means of implementation. Traditionally, the most important thing is to reduce interest rates.

US Federal Reserve (Fed) base rate (federal funds rate %)

The involvement of the Fed in market interest rates theoretically directly affects business decisions by sharing the difficulty of market participants in accessing money, which increasingly "estimates" respect for the rights of companies than the two methods mentioned. However, as can be seen in the figure above, after two consecutive years (the impact of the crisis on subprime loans in 2008 and the global spread in 2020), Fed One night interest rates have reached a low close to '0', and the Treasury at 10 years. performance entered a negative environment. Scope in early 2020., other interest rates may not meet financial support needs. As a result, providing direct market capitalization investments has become the Fed's simplest "firefighting" tool. In other words, buying government contracts and real estate contracts directly from the company gives former investors a timely return on profits. Pictured below, total asset purchases from the Fed hit their highest level since 2008 and crossed the $8 trillion mark. in the first half of the year.

Total Fed Funding (millions of dollars)

A few years ago, this "copy of money to buy the debt" if the US funding is the right to the wall Street in 2 days ago. Close to it. For many years, Yeongjong, who was Fed by Federal, who was supported, and we feed our fix three. We know that money today does not have the "story" and profitable account to write other important information we have planted. In other words, the slope of this line is the promotion of American debt in 1970. 28000, 200820. The debt increase the amount of every steering wheel Steps are higher than the previous steps, and continue to manage the border in the future industry.

Million US Government Dollars

Total US currency in circulation M2 (USD billion)

Yes, due to the continuous inflow of water into the market (see figure above), the increase in total remittance income has led to a significant increase in income. Expect More Consumer Products Next Year Expectations - 6% (Figure 1 below, based on consumer expectations for next year based on online research) and theoretical expectations for the financial sector over the next 10 years - 2.37% (Figure 2 below).

Consumer inflation expectations (%) for next year, according to online research

Info case for 40 years has to prove that Fedity Fluidity has been unexpected fluids. However, due to long-term economic challenge, US funding that lost their performance. Fed up to create third cards for administrative laws - quickly modification of debt: ensure rates. The time is attached to each other is bad until the shots are fastened to 0 and the trailing path is reduced and the trail. US-Fixed the first monthly monthly monthly monthly monthly monthly monthly monthly monthly month every month month each month each month each month each month Monthly monthly monthly monthly) monthly) monthly) monthly. Shots love. However, since the final verse in US status, thinking the operation of the month, while the market has more notification. March next year. Developing the fluid and estimate of the government of the government of December 15. Copy, and we have more businesses, and we have a US commercial in the US marker who knows the US Businesses With US economy in the plague bacteria (the silver amount of money). A short-term opinion in the market investment is more likely to work in the business. In fact, generalization has been exposed to daily development is recommended by the "macro" management operation. One of the highest work environments one of the heavy levels is "micro" performance success, with multiple secrets.

Market share is not equal in terms of supply and needs

Compared to the third quarter US jobs data discussed in the previous article, US unemployment data (4.2%) is still improving today and jobs selected by companies and government agencies are always high. With so much work in 20 years (see below), the need for community service has emerged from the shadow of contagion during the recovery period and the Fed's loose money policy is 'good' in support to businesses.

Number of non-farm (including public) employment in the United States in October 2021 (/thousand)

However, the advantages of the request is about the necessary information that is necessary for our concerns. The unemployment is reduced and the curriculum indicates that the unemploymenter is not requested and did not find a new job and stop looking for a new job. A reason if there are many new jobs not carry. This is also represented by business work now on the file section of all situations, such as figure below. We can see clearly that many businesses, especially the largest hits and work levels of business businesses (2020/2), but do not only affect chains. It is considered a recent decision. The main reason for the continuing increases. So how do you understand what relatives are related to new work? Is the unemployment value less with a lot of work? One of the main reasons is that the American Children's birds near America or other children

Impact of infectious diseases (2020/2) Impact on unemployment by all sectors - November this year (%)

The generation has been a new year's new year every year each year. Therefore, acceleration from the business market has the declaration of declaration. At the end of November, this information is 4.8% of the average amount of agricultural places, which means at the same amount of power-ups money from the general work period. This is the case of the user-called statistics to say about the previous message (Land, Education, Healthcare). Not mind). This is also clear that the recipients of the entire enjoyment of future financial financial financial and federal governments are required. For those who enter name or accept for retirement age, and the amount of funding (and the most important asset in the assets in last year). Compared with young people, increases the amount of value is height and energy necessary to increase, the necessary options of economic choices. Due to the amount of work is very attractive, American government gets money is a relationship of the trading model. It is not irrelumed at economic. I think it will be a bird to make a speedy break. It cannot be asked to take advantage of the work of work (middle and more money

US Non-Farm Payroll Average Hourly Earnings % Increase Year Over Year

The Fed's Policy Challenge

In times of economic crisis caused by the global spread, financial support for industry to ensure the normal functioning of the industrial sector and the gradual recovery of employment for the American people has become a top priority for the Federal Reserve. However, since the production and export of many products around the world are severely affected by transmission and supply shortages (the most common example is the global chip shortage), the injection of inability to market will increase consumer demand and increase consumer market value. in November this year, the increase was 6.8%, the highest in 39 years. This inconsistency continues to support the industry to ensure performance and price stability are critical at the top tier.

Inflation must be tighter than liquidity

The announcement of these needles is called the "Federal Federal Code of Law. We have discussed the defects of CPI statistics. Students conclude if the amount of customers is the most obvious and easy to listen to the Lord. citizens. The main value of assets such as a treasure tool has increased a 23.7% of December 20, as decimited by December 20 Problems when creating this new problem. The most popular customer from the user CPI CPI user sells CPI rises, bankempty of foam resources are heavy CPI. Problems. I know how to say how to do the liquid. From this point of view, feds are added to expand or expand the current liquidity support. That is why the breast feeding in mind "2" in the decision, "step" "step" strictly for success.

Data works well but there is no need for simplification

Review above is based on American staff to the US level, but many people have not been able to work again. All employees are completely perfect and the company's business is not satisfied. Therefore, improve data operations believes the government's studies to improve our future industry. This also determines the interest rate, before the net implantation of the market, but only the symbols of "tightening" is described. If the information worked for the future, the Fed ability to prevent this to make this improve the fun, "recommendation is softened by life's ability to come from default. Right work that resolves the previous actions model job. There is a reason why the financial policy can cause shock of long-term operation of the work is attached.

The pursuit of international channels and the hard work caused by the uncertainty of the transmission demanded the right to change.

The world's special industry has an unexpected program for a non-success of government plan, and this answers will change due to illness. Fed was far from work, price and other business skills "true". This can expect the right to call and weakened by the new improvement of mutant diseases. Business services and work is feeling better. Increases can be completed and gone and the indicator will be strong. The situation is easy to describe the main theme as a result of infection. The work is not a bad thing, but the equipment has been strong and the amount of money is very easy and the second order of the processing quickly. The "improvements are different.

Therefore

This article examines key current market indicators such as US Treasury yields, real interest rates, commodity prices (CPI, lagging indicators) and financial expectations (Intro), operational data and key points current problems. Ruling of US dollar economic system.In recent years, especially in the two years since the global epidemic, the Federal Reserve has been the most important economic regulator and regulator in the United States, respected as the world's reserve - the most important of the US dollar and the largest economy in the world. On the one hand, the country is working on a long-term “macro” industrial policy, following two measures: “maximum efficiency” and “price stability”, while responding relentlessly to the short-term “micro” economic policy. "The need for business ups and downs, the White House needs politics, etc. General interest and discussion of financial considerations. Even the "macro" economy should and can realize the rapid change in the "micro" needs of the industry, this is theoretically not the case. believe it.

We believe that the Fed will propose abandoning its role of "clear control" of economic measures, avoiding "improvement of the economic system" in policy, adhere to long-term fiscal policy, and reconsider fiscal policy. think it's the only way. The fundamental goals of "increased productivity" and "stable prices" could support the long-term growth of the US economy.

Analystes : Dr Ma Zhibo 1, Dr Xiang Shaohua 2

Associations : Global Value Chain et Bill Financial Research Center of China University of Political Science and Law, Shenzhen Zero One College, Companion Guest Data

Report number: TBD21-YB04

Date: 2021/12/20

Information and documents:

Dr. Ma Zhibo, director of Peerke Data, financial research specialist, digital expertise specializing in modern financial research and the theory of programmable monetary systems.

Dr. Xiang Shaohua, Dean, Shenzhen Zero One College, Professor Emeritus, Bloombase Inc., a Silicon Valley data security company. the founder. He is an expert in Shenzhen University of Technology, looking for a director and a director of the Big Data and Internet school.

This article first appeared at https://www.cnbc.com/2021/12/13/el-erian-says-transitory-was-the-worst-inflation-call-in-the-history-of -the-fed.html

Source : https://www.bloomberg.com/news/articles/2021-11-30/powell-ditches-transitory-inflation-tag-paves-way-for-rate-hike

https://www.federalreserve.gov/aboutthefed/the-fed-explained.htm

The Fed's direct purchase of financial instruments with an equal asset mix is ​​not included in this article due to weak pricing due to political controversy.

This article first appeared at https://www.wsj.com/articles/shelton-yellen-debt-ceiling-borrowing-limit-debate-fed-treasury-interest-payment-remittance-11634133423

This article first appeared on https://www.cnbc.com/2021/12/14/the-federal-reserve-is-expected-to-take-a-very-big-step-toward-its -first-rate -hiking.html

https://www.nytimes.com/2021/11/03/business/economy/fed-taper-bond-buying.html

https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details

This article was first published at https://www.cnbc.com/2021/12/15/fed-will-aggressively-dial-back-its-monthly-bond-buying-sees-three-rate- hikes-next-year .html

https://fred.stlouisfed.org/series/LFWA64TTUSM647S

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https://tradingeconomics.com/united-states/house-price-index-yoy