What does the Fed ’s reduction of debt mean?
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What does the Fed ’s reduction of debt mean?
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1. The Fed's reduction of bond purchase means that the Fed's purchase of bonds is reduced, which means that the US inflation rate is relatively high. The Federal Reserve is a measure to reduce the purchase of US bonds by reducing the purchase of US bonds. Born.
2. The Fed is an institution that formulates monetary policy in the United States. The full name is the US Federal Reserve System. Like the central bank of my country, the responsibilities are to maintain a reasonable level of inflation in the region and stabilize the financial market. Policies, such as interest rate hikes, and loose monetary policies, such as interest rate cuts when currency tightening. In the context of the spread of the global epidemic, the sequelae of the epidemic are gradually showing, and the sudden inflation pressure has led the central banks of various countries to adopt a more flexible monetary policy to alleviate the pressure of accelerated inflation.
3. From the latest economic data analysis released by the United States, the core PPI in the United States increased by 7.7%year -on -year. In addition, the US November PPI increased by 9.6%year -on -year, which also set the largest year -on -year growth rate in the past 11 years. In the face of severe economic data performance, the Federal Reserve has to take corresponding measures, including accelerating the reduction of debt purchase, and a decrease of $ 30 billion in monthly asset purchase scale. Before that, the monthly decrease was 15 billion US dollars.
4. In addition, with the acceleration of inflation, the market has estimated that the Fed's risk of interest rate hikes next year. Once the Fed enters the interest rate hike period, it will have a lot of impact on the global market. Especially for emerging economies, the return of a strong dollar may accelerate a new round of wealth shuffle.
5.2022 is not an accident. However, from a market perspective, it may be more concerned about the frequency and number of Federal Reserve's interest rate hike next year. However, considering that the Federal Reserve's benchmark interest rate is already very low now, even if we have adopted several small interest rate hike strategies, it has not fundamentally changed the state of the Fed's low interest rate environment.
6. Long -term low interest rate market environment has become the foundation of long -term bull markets in the US stock market. As long as this environment does not have a fundamental reversal, the operating trend of the long -term bull market in the US stocks will not be easily ended. In addition to the factors of long -term low interest rates, it is also inseparable from global technological changes and the active measures of listed companies to take repurchase cancellation. The conditions for the long -term bull market in the US stock market are more complicated, but once the market trend is confirmed, it means that this operating trend will not easily change.