Short-term shocks in overseas stock markets, Fed interest rate cuts again
Securities Times reporter Wu Jiaming. In recent times, the epidemic of new crown pneumonia in South Korea, Japan, Italy, Iran and other countries has begun to spread. Subsequently, the development momentum is unpredictable, and financial markets have also followed.
At this time, the market’s call for the Federal Reserve to cut interest rates again.
During the Asian stock market trading stage on the 26th, the Asia-Pacific stock market generally fell, and the Japanese stock market’s Nikkei 225 index fell 0.
79%, the South Korean stock market composite index fell by 1.
European stock markets opened lower, and the British, French, and German stock markets fell more than zero during the session.
US stocks fell sharply on the 25th, with the Dow and the S & P 500 losing more than 3%.
Howard Silverblatt, analyst at S & P Dow Jones Indices, said the market value of the S & P 500 has evaporated in the four days to the 25th.
$ 138 trillion.
Seema Shah, chief global investor and chief strategist at investment institutions, pointed out that the impact of social media news, the interconnectedness of global supply chains, and the high stock market make Wall Street more vulnerable to the “black swan” incident.
In addition, market data show that the yield on 10-year US Treasury bonds fell to 1 in recent days.
31%, which is lower than the record low set by the British referendum in July 2016.
Jim Caron, manager of Morgan Stanley’s fixed income fund, said that as long as investors buy large amounts of safe assets to offset investment in risk protection, the yield on US debt will continue to be replaced.
Wall Street analysts believe that U.S. Treasury yields will continue to decline, even slightly, which means that the severity of public health security incidents will hit the economy, and traders are increasing their bets that the Fed will relax its policies by the middle of the year to support the economy.
Affected 武汉夜生活网 by the new coronary pneumonia epidemic, the market expects the Fed to cut interest rates.
The Chicago Mercantile Exchange ‘s Fed observation tool shows that the probability of the Fed cutting interest rates at its April meeting is more than 53%, and the probability of another rate cut at its June meeting is 76.
2%, the probability of a rate cut in mid-September is close to 90%.
Fed Deputy Chairman Clarida said that the Fed sees public health incidents as a major threat to economic growth, but it is not clear to what extent, and it is too early to change policy.
If the economic outlook changes, the Fed will respond.
However, some market participants said that the market has responded to the Fed’s expectations of a rate cut. If the Fed ignores this, it may further exacerbate market turmoil.
At the same time, if the Fed cuts interest rates in accordance with market judgments, it may fuel speculation and asset bubbles.
In fact, the global supply chain is intertwined, and any interruption of the chain is not conducive to economic development.
At the recent meeting of the Finance Ministers and Central Bank Governors of the Antique Group of Twenty (G20), officials at the meeting have overlapped, and this year should implement a moderately loose monetary policy and a proactive fiscal policy to mitigate the impact of the epidemic on the global economy.