Tightening of monetary policy the U.S. Federal Reserve in the near future will not be.
Summing up the results of the past in 2009, the Federal Reserve System (FRS) the USA reported that gross domestic product, stepped over a negative value, and reached 3.5% year on year, exceeding the predicted value of 0.3%. Also, there was a decrease in unemployment and increase in economic activity, particularly in the implementation of the residential real estate. During the 2008-2009 year to support the financial sector has been allocated from the national budget $ 700 billion. Already 23 banks have paid to the state and returned the money spent on their support. These results, experts say that the U.S. economy began to emerge from a prolonged recession.
In this regard, the Fed is taking the first steps in the exit strategy-fold greater part of programs to support liquidity at the end of Q1 2010. Last week was raised "discount" rate (the rate at which banks borrow money from the Fed) to the level of 0.75%. However, the Committee intends to maintain the target level of the base interest rate in the range of 0-0.25%. Recall, for the same period in 2008, this rate was reduced 7-fold. According to a survey of analysts by Bloomberg, raising the base interest rate will be in the 3rd quarter of 2010. It is expected that by year-end interest rate reaches 0.75%. For comparison, the Bank of England base rate is 0.5% per annum, the European Central Bank 1% per annum and the Bank of Japan 0.1% per annum.
In addressing the conservation base rate no doubt, as Fed Chairman Ben Bernanke has repeatedly spoken with the announcement that inflation "will remain depressed until". But the premature folding anti-crisis program could trigger a new round of crisis, the head of the Asian Mission Morgan Stanley Stephen Roach. He accused the Fed is that fast cuts and a slow increase in interest rates contributed to the blowup, and collapse of the mortgage market, which ultimately led to a global crisis.
At present, the Fed can "go too far" to tighten monetary policy and, in addition to existing financial bubbles and prevent the formation of new ones. Example of the "financial bubble burst" - a situation that occurred in Greece. In early February it became known that the investment banks on Wall Street helped the Greek government to hide its debt by offering derivatives. And, trying to remedy this situation, the Fed, along with investigations initiated by the incident, working on the project and to stimulate the economy of Greece.
Fears of global analysts still be heard. In the semi-annual report on monetary policy of the Federal Reserve, which was held February 24 in Washington, Fed Chairman Ben Bernanke said that "the Fed will take measures to gradually tighten monetary policy of the country only after the national economy will be in a stable condition and when will develop all the necessary conditions. " We hope so.
Xenia Low
