Difficulties come, but also rely on the young mother.

Editor’s note: This article from the public micro-channel number ” Yunfeng Finance “(ID: majikwealth) , author Yunfeng Finance.

At a time of market turmoil, former and current Fed chairmen have exchanged with the market through meetings and media channels. ♪

Successful chairmen have transmitted more clear monetary policy signals through media channels during the financial turmoil. Former Federal Reserve Chairman Greenspan had an interview with the ABC in 1987. During the financial crisis, Federal Reserve Chairman Ben Bernanke also rarely participated in the CBS program in March 2009. Lun also gave a TV interview in PBS NewsHour. ^

Yesterday, the former Federal Reserve Chairman Yellen participated in a conference call with Citibank, and then the current Federal Reserve Chairman Powell attended the CBS “60 Minutes” program. Among them, the information increase is large, which has guiding significance for the future monetary policy direction and economic outlook. Yunfeng Financial organizes the core information points and shares them with you. … p

Monetary policy is kept as wide as possible Loose

In fact, as early as the end of last year, the market expected 2020 to be a year of loose monetary policy. But after not thinking about the dramatic changes that began in 2020, Powell directly acknowledged that there is no upper limit to monetary policy.

Powell states that the Fed can continue to provide funding to residents and corporate sectors that need credit support, as long as it is endorsed and supported by the Treasury. For every $ 1 of fiscal guarantees the Fed can use to support a $ 10 loan. Powell even more categorically stated that as long as there is a credit collapse in the capital market, the Federal Reserve will provide relief under special circumstances now.

“We will do such a rescue very radically and directly.”

“We will keep that that aggressively and forthrightly as well as we have had.” We are going to do it, we are going to do it, we are going to do it, we are going to do it, we are going to do it, we are going

This is undoubtedly a good “forward-looking guide”, giving the restless market a dose of unconditional underpinning.

At the same time, Powell pointed out in the interview that there is no inflation risk at present. It is more important for SMEs to get the required cash flow than inflation. Yellen even said that inflation will not be capped at 2%, and 2% to 3% are acceptable. The Fed’s tolerance for inflation further reflects the loose determination.

As of now, the Fed has not considered negative interest rates. Powell did not mention any words about negative interest rates in the interview. Yellen also pointed out that short-term interest rates in the United States will remain close to zero, which is the lowest level of interest rates before entering negative interest rates until the U.S. inflation rate. Achieved the 2% goal. And Yellen believes that there must be clear evidence that the crisis has passed before the Fed can withdraw these emergency economic stimulus tools. Today’s loose state will exist for a long time.

In the future monetary policy space, Yellen believes that in addition to supporting liquidity policies, there is not much room for traditional US monetary policy. The current short-term interest rate in the United States is zero, and the Federal Reserve has launched an unlimited asset purchase plan. But Yellen believes that the Fed can give more forward-looking guidance if inflation declines further or the economy will delay recovery. ^

The economy can rebound on its own after the epidemic is controlled.

Powell now acknowledges that the U.S. economy is likely to be in recession, but Powell has emphasized this time and again.The particularity of the second economic crisis.

This economic downturn is different from other downturn cycles. It is more caused by external force majeure than by internal economic vitality.
  Because in the normal economic recession period, people will not be forced to close stores, stay at home, or engage in any consumption behavior by some kind of instructions. These behaviors could have been done spontaneously by economic entities in the recessionary economic environment. This time, It’s quite different.

At the same time, before the outbreak, the US economy remained resilient, consumption was strong, and unemployment remained at a low level for 50 years. Therefore, once the epidemic is under control, people will immediately When you go out, the shops will reopen, and the healthy economy will rebound strongly and return to the original track.

Yellen also expressed a similar view on the economic outlook, thinking that the current problems may be recovered in the short term. One is the impact of the epidemic on some industries. The most obvious problem caused by the stagnation of economic activity is the huge decline in sales, including industries such as catering and tourism. It is expected that revenue will decline by 70%. The other is the labor market problem, where unemployment may soar to the levels of the Great Depression.

For the number of applicants for unemployment benefits announced yesterday that exceeded 3 million, Yellen said that number is at the upper end of the expected range. This figure reflects the current situation in the labor market, and also indicates that the unemployment rate may increase significantly in the short term. If stagnation in economic activity continues, the number of jobless claims will continue to rise.

In addition, Yellen believes that the crisis is not the same as the financial crisis of 2008 After more than ten years of strict supervision, the current The banking system’s balance sheet is healthy, with more funds and stronger liquidity to withstand the pressures of the moment. However, based on future instability, if the suspension of economic activity continues for too long, the banking system will also be severely impacted.

The effectiveness of monetary policy lags behind, and fiscal policy is a top priority

During the crisis, policy stimulus was intensified, and people often confused the boundaries between monetary and fiscal policies.

In the interview, the host asked that now that the Fed is going to solve corporate financingThe question is, if my nail shop is closed or the restaurant I opened is closed, can the Fed ’s current approach help me? ^

Powell believes that a $ 2 trillion fiscal stimulus plan is the most effective way to save these individuals at this stage, and the Fed’s help will not show up until the economy starts to rebound. Therefore, The Federal Reserve is more of a role in supporting the economy and maintaining the ability of the economy to recover. Direct treatment of the current difficult groups still depends on the strength of fiscal policy.

When it comes to the $ 2 trillion fiscal plan, the government deficit is also a hot spot for the market (

But from 2007 to 2019, U.S. debt burden has not increased with a significant decline in interest rates. Yellen also said that U.S. interest rates will maintain ultra-low interest rates for a long time.
 

In addition to current policies, issues such as population aging will further increase the fiscal deficit, and this aspect will continue to be watched.
  But Yellen believes that concerns about the fiscal deficit will not prevent policies from being introduced in the current crisis situation.
 

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