North America Observation 丨 Federal Reserve Eagle Signal detonation of the stock market Daoxing more than a thousand points

On August 26 local time, the Federal Reserve President Powell said at the Jackson Hall Global Bank Annual Conference that the Fed will continue to raise interest rates and maintain a high interest rate for a period of time. Essence This remark was interpreted by the market as the release of the eagle signal, indicating that the Fed will fight inflation at the expense of economic growth at the expense of economic growth. The US stock market plummeted on the same day, and the Dow Jones Industrial Average fell more than 1,000 points.

△ Bloomberg reported that Powell delivered an eagle speech, saying that interest rates will remain high for a period of time.

The US stock market plummeted across the board

At the annual Jackson Hall Global Central Bank Annual Conference, Powell delivered a speech on the U.S. inflation situation and monetary policy, saying that the Fed may be maintained for a while after the interest rate hike to the limited level. Historical experience shows not to relax the policy prematurely.

Powell said the current primary task of the Federal Reserve is to reduce inflation to the target level of 2%, and tools need to be used to balance supply and demand. At the Monetary Policy Conference in September, the Federal Reserve raised interest rates again may be appropriate, and the interest rate hike depends on the overall economic data.

Powell also acknowledged that reducing inflation may require a period of economic growth that is lower than trend, and the labor market conditions are likely to occur. Although higher interest rates, slower growth, and relatively weak labor market conditions will reduce inflation levels, they will also bring pain to families and enterprises. These are the costs that need to be paid to reduce inflation. But if the price is not restored, it will mean greater pain.

Some market analysts believe that Powell's latest eagle speech shows that the Fed will raise interest rates again in September, and suppress some views on the market that inflation has seen the top and the Fed will quickly reverse the direction of monetary policy. Before Powell delivered a speech, the three major stock indexes were roughly flat. After the speech, the market began to fall, until the closing of the market expanded.

The selling tide of the day made the major stock index closed down for two consecutive weeks, and basically removed the increase in the stock market since the end of July. As of the close, the Dow Jones Industrial Average has fallen 1008.38 points to 32283.40 points, a decline of 3.03%, the largest single -day decline since May; the Standard 500 Index fell 141.46 points, a decline of 3.37%to 4057.66 points; The Lord's Nasdaq Composite Index fell 497.55 points to 12141.71 points, a decrease of 3.94%.

△ CNBC reports, Powell's speech helps push a 1000 -point plunge on Friday in the US stock market

Many economists criticize the Federal Reserve

As the Federal Reserve ’s interest rate hike exacerbated the risks facing the US economy, during the global central bank's annual meeting, the voices of the Federal Reserve’ s criticism continued to exist. Some economists have criticized the Federal Reserve to fail to foresee the soaring level of inflation as early as possible. At first, it was also said that the inflation in this rotary was only "transitional." Now that it is forced to radiate interest rate hikes in order to fight inflation, it has brought risks to the real economy and financial markets.

Professor Vinod Agarwal, a professor at the University of Odoming University, told CCTV reporter to the Central Radio and Television CCTV reporter: "My personal point is that the Fed should start to raise interest rates as early as January, but They did not do this, so we think they are behind the situation. The reason why they lag behind the situation is that at first they believed that inflation was a transitional phenomenon, a temporary phenomenon that would eventually disappear. The significant impact of the supply chain problem will lead to further rise in prices. Therefore, there are several forces to play a role. On the one hand, the US economy has been stimulated by trillions of dollars, and there are a lot of demand. But on the other hand, due to the supply chain problem, the supply did not keep up with demand. I did believe that the Federal Reserve was still behind the situation at the time. "

Some economists believe that in the past two years, the United States has at least some responsibility for inflation in this round of inflation out of its own economic policies. First, in order to cope with the new crown epidemic, the Federal Reserve has adopted extremely loose monetary policy, providing a fluid foundation for high inflation; second, after the outbreak, the US government has launched multiple rounds of financial stimuli, which has led to excessive expansion of total demand, which exacerbates supply and demand for supply and demand Equipment.

John Rosen, a professor of economics at New Hei Culture, told a reporter from the CCTV CCTV: "Faced with more and more evidence shows that inflation is coming, the Fed will maintain ultra -low interest rates for too long. They let inflation inflation. Ascend to at least a very high level if it is not out of control. Now, they have made a more radical response to curbing inflation than other circumstances. One of the reasons I put forward is The Fed is not independent of the government. It is just an independent department in the government system, which means that it has great power to make independent decisions, but in the final analysis, it is still part of the government. If the government wants it to release water and provide a lot of flows, it will provide a lot of flows. Sex, providing funds for government expenditures, it is difficult to resist. "

At the same time, former US Treasury Secretary Lawrence Summers recently said that the Federal Reserve should send a clear signal that in order to fight inflation, it is necessary to implement restricted monetary policies and acknowledge that the policy will increase the unemployment rate.Samers has repeatedly criticized the Fed's interest rate hikes for being too slow, and is regarded as one of the Fed's most blunt critics.(CCTV reporter Gu Xiangzheng) Reprinted: CCTV News Client

Edit: Wang Bomi

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