Whether the Federal Reserve ’s strong interest rate hike will repeat the" Walker Moment "

Xinhua News Agency, Washington, July 27 (International Observation) Whether the Fed ’s strong interest rate hike will repeat the" Walker Moment "

Xinhua News Agency reporter Xiong Maoling

The Federal Reserve Commission announced on the 27th that 75 basis points raised interest rates. This is the fourth rate hike of the Federal Reserve this year and the second consecutive interest rate hikes 75 basis points, which is the largest concentrated interest rate hike since the early 1980s.

In the early 1980s, the then Fed Chairman Paul Walker continued to raise interest rates to reduce the level of American inflation from the dual digit in early 1980, but the price was twice in the two years of the US economy. "Walker Moment". Now facing continuous high inflation that has not been encountered for forty years, will the Federal Reserve repeat history and control inflation at the cost of recession?

Radent interest rate hikes are difficult to curb inflation

The Federal Reserve Chairman Powell said at a press conference held after the meeting that it may be appropriate to perform "extraordinary large interest rate hikes" at the September meeting. The Fed observation tools of the Chicago Commodity Exchange showed that on the 27th, the probability of traders expected the Federal Reserve to raise interest rates in September 65%.

Continuous interest rate hikes, highlighting the slow situation of the Fed's initial operation and can only accelerate the control of inflation today. In June, the US Consumer Price Index (CPI) increased by 9.1%year -on -year, an increase of nearly 41 years.

Adam Poson, director of the Peterson Institute of International Economics, told Xinhua News Agency reporters that so far, no positive progress has been seen in alleviating inflation, which is expected. The Federal Reserve's policy conduction has a period of time, and the slowdown of inflation may not appear until the end of this year.

Inflation is still high, but the influence of the Fed's interest rate hike has increasingly appeared. Powell pointed out at the press conference that recent expenditures and production indicators have softened, and consumer expenditure growth has slowed down significantly, reflecting factors such as the decline in actual disposable income and tightening the financial environment. The weakening of real estate market activities is partly due to the rise in mortgage interest rates. He does not think that the United States has entered an economic recession. However, he admits that the U.S. economy avoids decline and "soft landing" has narrowed, and it may become narrower.

"Walker" pain is inevitable

Some economists point out that "Walker" economic pain may be a necessary price. Former US Treasury Secretary Samers recently pointed out that the United States needs more than 5%of the unemployment rate in five years to curb the current soaring inflation.

New York University economist Nurir Ruibini has warned that extremely loose currencies and fiscal policies, if a series of negative supply shocks are superimposed, it may lead to stagnation in the 1970s. "Walker Moment" is coming.

The latest predictions of the Association of Atlanta Federal Reserve on the 27th show that in the second quarter of this year, the actual GDP (GDP) in the second quarter of this year (GDP) was calculated by an annual rate of 1.2%. According to data from the US Department of Commerce, the US economy shrinks 1.6%in the first quarter of this year. If Atlanta Fed's forecast becomes a reality, this will mean that the US economy falls into a technological recession.

Economist Destmond Rachman, an economist of the US Enterprise Research Institute, told reporters that the Fed's tightening monetary policy has had a significant impact on the financial market. In the first half of the year, the stock and bond markets fell sharply, and some economic growth began to slow down. At the same time, the demand for housing has been significantly reduced due to rising interest rates and declined consumer confidence. Rahman is expected to fall into a decline at the end of this year.

A survey by US Consumer News and Business Channels on fund managers, analysts, and economists shows that 63%of respondents believe that the Federal Reserve policy will lead to economic recession. They believe that more than half of the US economy will fall into a decline in the next 12 months.

Global interests are harvested again

Globally, the Fed's tightening monetary policy has brought a significant spillover effect. Rahman pointed out that the US interest rate hike has caused a large amount of capital outflows in emerging markets, similar to the previous interest rate hike cycle. This has led to a significant depreciation of the currency of emerging markets and promoted the debt risk of high -debt emerging market economies.

In the eyes of some economists, the current U.S. economic decision -making path seems to have known each other: when facing a major economic impact in the early stage, large -scale debt printing and printing costs are used to stimulate the economy; over the overlapping economic recovery of the US dollar liquidity, Tightening the monetary policy and prompting capital to return to the United States, the dual impact of many countries suffering from malignant inflation and capital outflow.

Ruabini, an economist at the University of New York, believes that the current global debt level is much higher than in the 1970s. The Federal Reserve can bring more serious consequences than at that time through radical interest rate hikes, which may lead to economic depression.

James Morrison, an associate professor at the International Political Economics School of Political Economics, told Xinhua News Agency that with the central position of the US dollar in the international financial system, the Federal Reserve ’s interest rate hike will inevitably have a negative impact on the world. The world economy declines.

[Editor in charge: Zhou Chuqing]

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