High inflation test where the global central bank's soft landing reputation investors find a shelter

21st Century Business Herald reporter Hu Tianzheng Beijing report

"Things have become more tricky" -the intuitive feelings of the central bank's almost coexistence. From the beginning of last year to the present, the spokesperson of the monetary policy was steadily stabilized between "stabilizing economic growth" and "curbing overheated inflation".

Recently, some central banks have tightened the monetary policy in advance at the last moment. During the June interest rate interest meeting, the Federal Reserve stated that 75 basis points were decided to raise interest rates. The Federal Reserve President Powell said at a press conference that the interest rate hike was appropriate. However, just a week ago, the Fed officials repeatedly stated that the interest rate hikes of 50 basis points.

The recent position of the European Central Bank President Lagarde is also harder than what it previously hinted, and it has clearly stated that July is a rate hike of 25 basis points. Subsequently, in the early morning of June 15, local time, the central bank held an emergency meeting saying that it was planned to raise interest rates at a speed at a speed of expected, but it did not let investors clearly know how it would surge in yields.

The showdown between the Bank of Japan and traders is also upgraded, because the sustainability of its super loose monetary policy is difficult to make the latter believe. Last week, Japan's 10 -year bond futures had a biggest decline since 2013; the 25th basis interest rate hikes of the Bank of the United Kingdom this month were accused by the market. The central bank did not claim to take strong action when necessary.

On June 26, local time, the International Clearance Bank (BIS) warned in its annual flagship report that the major economies are approaching the "slip" world of high inflation. The key tasks of central banks in various countries are Actions quickly and decisively before.

The central bank may need to take greater policy actions to relieve inflation pressure, but in the investment map, investors often bear the consequences. At present, risk assets that are sensitive to interest rates are accelerating fluctuations, and investors are frequently judged, uninterrupted selling and re -betting, trying to make up for the previous prediction errors.

"Change the mouth" many times

Global inflation "high fever does not retreat and rises", the central bank can't help but take a greater tightening, and even suddenly "change its mouth" at a critical moment.

The Fed in June is the most prominent example. On June 15, local time, the Federal Reserve decided to raise interest rate hikes 75 basis points in the policy conference, raising the target range with a benchmark policy rate to 1.50%to 1.75%, setting its largest interest rate hike since 1994.

But the 75 -basis interest rate hike is not a signal released by Powell and its team members. Until the silent period of June, Powell insisted that the Fed could land softly this time.

Similar to the Federal Reserve, the European Central Bank is also harder than previously released expectations. At the June policy meeting, the European Central Bank announced the latest interest rate resolution and maintained three major interest rates unchanged. It was decided to start the purchase of net assets to stop the purchase plan of the asset purchase plan from July 1, 2022. At the same time The base point will take further action in September, and the specific interest rate hike scale will depend on the prospect of inflation.

Subsequently, because of worrying about the fragmentation of the bond market in the euro zone after the start of interest rate hikes next month, the European Central Bank held an emergency meeting on June 15 to explore the recent rise of the EU non -core and core national interest rates.

The Bank of England was considered "insufficient firepower" by the market by the market at 25 basis points in June, and it violated its commitment to "take strong action". The latest data show that the British CPI rose 9.1%in May, the highest among the G7 member states, slightly higher than the 9%increase recorded in April.

In the Asia-Pacific region, in the face of the continuous decline of the Japanese yen, the Bank of Japan will maintain the current benchmark interest rate -0.1%unchanged in June meeting. At the same time, it will implement the yield curve control and daily bond purchase operation. The Bank of Japan's Bank of Japan Monetary Policy said that it continues to buy bonds unlimited to defend the upper limit of the 10 -year government bond yield of 0.25%.

However, the high uncertainty is lingering. In the face of the Bank of Japan, which runs counter to most central banks around the world, the market is accelerating whether it can continue to maintain its "yield control" policy and curb the rise in the yield of daily bonds. Top.

The question of questioning of the Bank of Japan is getting louder. On June 23, local time, data released by the Ministry of Finance of Japan showed that the scale of Japanese bonds sold by overseas investors reached 4.8 trillion yen (about 35.3 billion U.S. dollars), which was the highest record in history.

Police surveys show that the public seems not satisfied with some central banks.

A survey released by Gallup in May shows that only 43%of the respondents have "great" or "quite" confidence in Powell's work. Although it is not the lowest among the recent Federal Reserve Chairman, it is far lower than 74%of Greenspan's early 2000. The latest quarter survey of the Bank of England shows that in terms of controlling prices, the people who believe that the dissatisfaction of the Bank of England exceeded satisfaction for the first time. people. After the President of the Bank of Japan, Kuroda Hida said that consumers are increasingly tolerant of prices, their support rates have begun to decline. A recent survey of Kyodo News revealed that 59%of people think he is not suitable for this job.

Credit is challenged but temporarily or intact

Under an ideal situation, a credible central bank does not even need to act -just words are usually enough to keep the market order.

At the end of 1996, Green Pan, then Chairman of the Federal Reserve, talked about the possibility of "irrational prosperity" in a speech, which caused adjustments to the stock market. During the European debt crisis, the European Central Bank Chairman Drageta made a commitment in London in 2012. Save the euro "at all costs" and prevent the sovereign debt crisis of the euro zone. The tacit understanding of Terragie's predecessor, Terry, and the media was that if he said that he was "very vigilant", the market's default policy meeting would raise interest rates next time. Even though some central banks are challenged today, people interviewed by reporters have said that the reputation of major central banks is still intact.

"In our opinion, the central bank's credibility of the policy that is committed to promoting economic conditions (including inflation) is still intact." Baodexin's fixed income chief European economist Katharine Neis and G10 economist Ellen Gaske was accepting 21 Century Economic Herald reporter said in an interview that during the new crown epidemic, real -time understanding what the appropriate policy is the difficulty encountered by the central bank. In some cases, the challenge also exists in the technical ability of the central bank when maintaining the necessary easing policy position. aspect.

The two said that over the years, some central banks, including the Bank of Japan and the European Central Bank, have been promoting loose monetary policies to cope with the long -term structural issues facing its economy. The sudden emergence of the new crown epidemic forced them to find new ways to provide excitement. Taking the Bank of Japan as an example, the cumulative effect unexpectedly affected market operations and exchange rates.

As for the Federal Reserve, it believes that the difficulty encountered in real time is to understand what the economy is in real time, where it will go, and what should be the corresponding policy path.

"In most of the economic crisis and economic recovery, the Fed followed the game rules used by the last time when the global financial crisis, that is, assuming that the current economic recovery will also be slow and long." Explain that the economic cycle of the past two years has been compressed more, and the speed and intensity of recovery are much faster than most predictors-including the Federal Reserve-including the Federal Reserve. "It is not a promise of the Fed's benefit to the economy, but whether it can fully understand and predict the net effect of the impact of economic recovery.

The two said that the Bank of Japan faces another reputation challenge and is more technological in essence. Although it is also very credible in pursuing policies suitable for the Japanese economy, the central bank has been questioned by the central bank's ability to maintain a relaxed policy position in the case of exemption from other G10 central banks to the eagle position.

"The Bank of Japan has enough firepower to continue its yield curve control policy, that is, maintaining a short -term policy interest rate is slightly negative, and at the same time set the upper limit of 10 -year Japanese Treasury yields to 0.25%." The determination and behavior need to be more active, which challenges the liquidity of the market and the operation of the government bond market.

At the same time, the yen of the pressure valve is sharply low, which is hitting the home purchasing power and pushing the investment cost of the enterprise. PGIM predicts that the Bank of Japan may try to maintain its current policy stance to fight potential growth rates and inflation trends. However, in the current global environment, the negative effects of the central bank's policy have caused some people to question whether the current policy portfolio of the Bank of Japan can stand.

Vanguard Investment Strategy Group Economist Maximilian Wieland also believes that in general, the reputation of major central banks is still intact. Take the Fed as an example. First of all, the market's expectations for federal funds are closely reflected by the Federal Reserve's recent economic prediction abstract released by the Federal Reserve on June 15. Secondly, the market's expectations for long -term inflation are not anchor. At the same time, since March of this year, the Federal Reserve has hinted that it will increase the determination to curb inflation, and inflation expectations have declined.

He believes that the market can reduce the inflation rate from 8.6%to 2.7%from the current 8.6%to 5 years and increase confidence.

Shao Yu, chief economist of Oriental Securities, told reporters of the 21st Century Business Herald that some central banks have reduced credit because they are unfavorable or slow. "The sharp depreciation of the yen soared the inflation in the United States, which caused the central bank's credit to decline.

Shao Yu said that the main central bank is now more aggressive, but even so aggressive or unable to completely control through. "Most of the central bank pays attention to the demand side and cannot control the supply side. At present, the impact of the supply side and the demand side occurs at the same time. If the inflation is adjusted only through demand, it may make the tightening more intense and the economy may not bear."

More tricky balance inflation and stimulating economy

One of the reasons for the authority of the global central bank is the choice between "economic growth" and "curbing inflation".

Maximilian Wieland said that central banks from various countries can learn from the experience of the mid -1970s and the early 1980s when facing stagflation. However, when "curbing inflation or maintaining economic growth", the situation of each central bank is different.

Most central banks including the European Central Bank, the British Bank and the Bank of Japan have only one task, that is, "stable price growth". In this case, suppressing inflation (or the introduction of inflation performed by the Bank of Japan to increase the inflation rate) is the main focus of most major central banks, which reduces the complexity of the policy path. In contrast, the Federal Reserve has a "dual task" of "maximizing employment" and "stable prices". Therefore, the Fed must balance the relationship between the targets of controlling inflation and the unemployment room caused by possible decline.

Powell reiterated the promise of fighting inflation during the testimony of Parliament. "We really need to restore the stability of prices and let the inflation rate fall to 2 %, because if we do not do this, we will not be able to achieve sustainable and fully employment."

Maximilian Wieland pointed out that historical evidence shows that interest rate hikes in the economy are very rare. Since 1950, the Federal Reserve has raised interest rates during the two economic recessions, respectively in the second quarter of 1974 and the second quarter of 1980. In other words, even if the economic recession that may occur in the United States will not prevent the Fed from raising interest rates further, while recession and unemployment continue, it will definitely reduce the possibility of further tightening financial conditions on a large scale.

From the perspective of PGIM, the central bank has strengthened its tightening and implemented a policy tightening plan in advance. This reaction is also intended to maintain the credibility of the central bank's commitment to achieve inflation goals. The market and surveyed inflation expectations generally voted for the central banks of various countries to vote for the central banks. I believe the latter has the ability to achieve the inflation target -at least in the mid -term or so far.

Is there nowhere?

The global stock market has entered the bear market, and the US Treasury yield has recorded the largest two -day increase since the 1980s, and the credit market has shown signs of increasing pressure. As a result, some people use the "nowhere to ben in the wind" to describe the current investment market.

Regardless of whether it is stagnation, inflation, currency is expanding, or soft landing, investors should be prepared to deal with various risks.

The strategist of Jiasheng Group believes that U.S. stocks are still in bear markets and may still have room for downside. The current market decline is not included in the price because of the killing valuation under currency tightening. It believes that the S & P 500 is still likely to test 3500 points in the future, and the pressure will continue until autumn. Unless the Federal Reserve "soft" or inflation really appears to see the downward signal.

The group strategist pointed out that risk asset fluctuations will intensify, and gold will become an effective tool for reducing the volatility of investment portfolios, and will still be a good place for decentralized investment portfolios. However, its reminder is that the rising interest rate is still the inhibitory factors of gold prices. Seeing many speculators now need gold to return to the trend line near $ 1860. If it is implemented, it may be a small rebound for gold prices to buy a small rebound in a new round of technology.

UBS is expected to have a significant rise in the US dollar, especially when other central banks also turn to a tightening model. Instead, there is the largest upward space for commodity -related currencies. "Based on the prospects of commodities in the next few months, the currency -related currencies related to commodities such as Canada and Australia will have the greatest upward potential."

UBS said that in order to cope with the risk of "stagflation", investors should establish and manage liquidity investment portfolios. Cash circulation should often meet the needs of 3-5 years, including cash, cash substitutes and short-term bonds. In addition, investors should be fully configured by the Chong Fund.

Secondly, in the face of the risk of "significant adjustments" in the market, UBS pointed out that investors should take defense measures, such as increasing the opening of high -quality revenue stocks, medical care segments, tough bonds and Swiss francs. The capital preservation strategy allows investors to use volatility while reducing potential downlink risks.

Energy and British markets may also have value investment. In UBS's "soft landing" scene, value stocks perform well. In the "security era", the government and enterprises aim to strengthen energy, data and food security, which will stimulate zero -carbon emissions, network security, and increase agricultural output -related stocks. At the same time, after the public market falls, private equity may bring good returns.

In Shao Yu's view, RMB assets are firm in the near future, or it is also a good choice.

"The impact on the financial market and investors depends on how economic data will develop, and it depends on different central banks." Maximilian Wieland said that under the influence of slowdown in economic growth, rising inflation, and central bank policies, it predicts finance The market is particularly challenging.

In view of the reasonable possibility of uncertain prospects and the further fluctuations in the financial market, he suggested that maintaining a balanced and diversified investment portfolio and long -term investment vision are still the best protection for investors to resist volatility and economic uncertainty. measure.

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