"The Fed's shift in monetary policy should not lead to a global financial turmoil similar to march 2020." On December 1, at the China Macroeconomic Forum (CMF) Macroeconomic Hot Issues Seminar (No. 39), Wang Jinbin, a professor at the National Academy of Development and Strategic Studies of Chinese University, said in a report released on behalf of the research group.
Wang Jinbin explained that first, the balance sheet quality of residents and enterprises is better than that in 2019 and 2020, although the US government debt has increased significantly, but the probability of default should not be; second, the shift in monetary policy does not represent insufficient liquidity. Compared with the liquidity of the global financial market before March 2020, the liquidity of the global financial market this year is abundant, and the liquidity of abundant liquidity cannot have a major crisis; third, there is uncertainty about high inflation. Recently, there has been a decline in inflation expectations, mainly due to improvements in transportation, supply chains, etc., but due to the possible impact of new virus variants on the supply chain, there is still some uncertainty about future inflation; fourth, the uncertainty impact of the epidemic determines that the Fed will not adopt a tightening approach that exceeds market expectations. TAPER to a large extent reflects the characteristics of the separation of liquidity and interest rate management, which determines that the international financial market should not be subject to a sharp impact on liquidity tightening and interest rates, and the interest rate rise in the international financial market will show a high probability of moderate increase in volatility.
"It is unlikely that US Treasury yields will exceed the high point in March this year, and the strengthening of the US dollar index does not have a medium-term basis." If the dollar index does not rise much and the dollar does not continue to strengthen, the impact on the peripheral market is relatively small. Wang Jinbin added.
Professor Cao Yuanzheng, chairman of the board of directors of bank of China International Research Co., Ltd. and former chief economist of the Bank of China, said that entering the next year will find an increase in risk, which has not been seen in the past, including both the impact of the epidemic and the entire deformation of monetary policy under the impact of the epidemic, the formation of monetary policy, fiscal policy and the same advance and retreat, including the impact of the new epidemic, especially the current situation of the global spread of the new virus is still uncertain, so next year is a market full of risks. In general, the economy will enter a normal state next year, the growth rate will be flat, the inflation level will be high, the shift in monetary policy is a high probability event, and the risks brought about by the shift should not be underestimated.
Professor Mao Zhenhua, director of the Institute of Economics of Chinese Min University and chairman of China Chengxin Group, said that the Fed's monetary policy is in the adjustment stage, but compared with normal, the US monetary policy is still in a relatively loose stage, and combined with some other factors, the US economy will still grow moderately next year, and the US monetary policy will not be in the process of strong reversal. Therefore, it is expected that throughout the year, the US capital market is still in this moderate upward channel, and it is not a downward period from the perspective of the whole year.
Chinese, a professor at the School of Economics at Renmin University, said that I think there are some issues that may need to be considered in today's changing environment of the global economic structure. First, the U.S. money supply. Expanding the balance sheet, the amount of breadth is good, since 2008 has been done several rounds, the world economic growth pattern changes or some, the most important thing is that the gap between the economic growth rate of developed countries and developing countries is now greatly narrowed, the future will not appear developed countries and return to high growth, the growth rate of developing countries, emerging economies further adjustment, is worth considering. If this is the case, the negative impact of the Fed's monetary policy changes on developing countries should not be underestimated, which is a change. The second very big change is the pandemic. Therefore, considering these two factors, the direction of the Fed's monetary policy this time, although everyone is judging whether it may occur such a change, but once this impact occurs, its significance is far-reaching. The impact on the Asian plate, combined with the biggest impact of the epidemic this time, in the absence of a full recovery in world economic growth, international commodity prices have risen. In such a stagflation background, the adjustment and reversal of the direction of the Fed's monetary policy may bring a further decline in economic growth to the world economy, and this impact on the real economy may be greater at the Level of the Asian Plate than in the European Plate.