The U.S. will withdraw from anti-epidemic relief measures in an orderly manner

Summary

[The U.S. will withdraw from anti-epidemic relief measures in an orderly manner. The industry expects that the overall market impact is under control]As the economic situation improves, the Fed said this week that it will gradually sell its anti-epidemic corporate bond portfolio. Market participants believe that the time for the Fed to withdraw from the epidemic relief measures at this time is appropriate, and the impact on the market is limited. It is expected that for a period of time in the future, the Fed will fully communicate with the market and gradually withdraw from the loose policy to minimize the market impact. Fed officials said that the decision to reduce corporate credit arrangements does not mean that the Fed will withdraw from loose monetary policy. The industry believes that this is the Federal Reserve comforting the market and minimizing its impact on the market. (Shanghai Securities News)

As the economic situation improves,MidlandChu said this week that it will gradually sell its anti-epidemic corporate bond portfolio. Market participants believe thatMidlandThe time for the Chu to withdraw from the epidemic relief measures at this time is right, and the impact on the market is limited. It is expected that some time in the future,MidlandThe Reserve will fully communicate with the market and gradually withdraw from easing policies to minimize market impact.

June 3, local time, the Federal Reserve Bank of New YorkannouncementSaid that it will gradually sell its secondary market enterprises from June 7CreditExchange transactions held by the instrument (SMCCF) invested in corporate bondsfund. The day before, the Federal Reserve announced that it would reduce the size of the investment portfolio under the SMCCF in an orderly and gradual manner. It is expected that the Fed will sell its entire portfolio before the end of this year.

SMCCF is a liquidity tool established by the Federal Reserve on March 23, 2020, through the purchase of corporate bonds issued by investment-grade U.S. companies in the secondary market and eligible U.S. listingsETF, To provide liquidity for outstanding corporate bonds circulating in the market to support credit to employers.

Zhao Qingming, vice president of the China Institute of Foreign Exchange Investment, said that the current US economic recovery situation is good and the financial system is relatively liquid. The conditions for the Fed to withdraw from the relief measures are appropriate now or in the future.

According to data released by the American Institute of Supply Management (ISM) on June 3, the US ISM service industry index was 64 in May, higher than market expectations of 63.2, which was the highest record since the statistics were available in 1997; the May ISM manufacturing index changed from April’s 60.7 rose to 61.2, higher than market expectations of 60.9, which is the 12th consecutive month in the expansion zone. The Fed said in its Beige Book survey report this week that the increase in vaccination rates and the relaxation of epidemic-related restrictions have a positive impact on the US economy. With the acceleration of vaccination, the outlook for the US economy is good.

Fed officials said that the decision to reduce corporate credit arrangements does not mean that the Fed will withdraw from easingcurrencypolicy. The industry believes that this is the Federal Reserve comforting the market and minimizing its impact on the market.

“From the perspective of monetary policy, withdrawing from relief measures is to tighten marginal liquidity, which will gradually increaseinterest rate.In order to reduce the adverse impact on the market, the Fed is expected to operateGo to the meetingVery cautious and will fully communicate with the market. When exiting, it will also proceed step by step, so the market need not panic too much. “Zhao Qingming said.

The Fed revealed in the Beige Book that Fed officials are considering how quickly they can reduce monetary policy support.The Federal Reserve will release itsinterest rate, The latest quarterly forecasts for economic growth, unemployment and inflation.InvescoChief Globalmarketing strategyTeacher Christina Hooper predicts that the market will see disagreements within the Fed. Participants urge the Fed to start reducing the scale of debt purchases as soon as possible. The outside world may see signs of increasing internal debates in the Fed.

Zhao Qingming believes that the current U.S. real economy is improving at an accelerating rate. The Fed’s withdrawal of relief measures will have little impact on the U.S. real economy, but it willAmerican FinanceThe market, but this effect is often short-term, because the financial market is more determined by the real economy and the overall liquidity of the market.

As for the impact on foreign markets, Zhao Qingming believes that in the early stage of the withdrawal of the US loose policy, the US dollar may appreciate to a certain extent, and capital will return to the US as the US dollar appreciates. This is not good for other countries, because other countries are especially emerging markets. The national currency may depreciate moderately. But from another perspective, if the domestic currency depreciates moderately, it will be good for exports or economic growth of these countries. On the whole, the impact on the vast majority of emerging markets and developing countries should be manageable.

(Source: Shanghai Securities News)

(Editor in charge: DF372)