Society: Dont ignore the impact of the tightening of monetary policy

Source: Taiwan Economic Daily

Economic Daily Society

The closure of the Silicon Valley of the United States (SVB) caused market panic, and also brought the evaluation of the effectiveness and side effects of the central bank's monetary policy.Especially last year, the US violence was as much as 17 yards, and the employment market was still tight. In January, the unemployment rate also declined and prices went up again.However, the reason why the outside world will have a strong interest rate hike is limited, but there are two main causes: one is that one is that the epidemic causes the structural structure of labor supply, and the people have accumulated a large amount of excess savings. The second is to underestimate the currency currency.The time required for policy transmission mechanism.

Specifically, the Fed's study shows that the popularity of the epidemic has caused a total of 3.5 million retirement and excess death in the United States, making the labor market unable to supply the workers needed for the economic recovery.In particular, the manpower gap in the service industry is very large, allowing the employment market to continue to become hot and pushing the salary -price spiral increase.At the same time, the US government has launched a large -scale relief policy during the epidemic situation. A large number of government transfer payment has increased household income, but the supply of supply caused by the epidemic is inconvenient to retain the money.It is estimated that at the end of 2021, the excess savings accumulated by families in the United States reached 2.3 trillion dollars, which became the main reason for consumer kinetic energy today.

Secondly, the transmission process of monetary policy is more complicated than most people think, and the time required is longer than imagined.Generally speaking, the central bank has adjusted policy interest rates to regulate inflation, which will roughly affect the total needs of the real economy from four channels such as credit, interest rates, wealth, and exchange rates, and indirectly affect prices.In other words, after the central bank's interest rate hikes lowered inflation expectations and increased the interest rate of the currency market, they will change through the conditions of credit lending conditions, substantial interest rates, asset prices, and exchange rates to increase demand to heat up, and then promote the decline in prices.Under the conduction of such stagnation and mutual traction, the monetary policy is transmitted to the real economy, which will affect prices, which must have a long lag, that is, "the side effects of violent interest rate hikes are not less, just late."

The research report of the Bank of England in February this year pointed out that the lagging time of monetary policy on inflation is about 18-24 months, and countries with higher levels of financial market development, the slower the transmission of the effect of tightening the policy.At the same time, the research of the International Clearance Bank also pointed out that from the beginning to interest rate hikes to the weakening of the real economy, the unemployment rate began to rise, which takes about 30 months.If it starts from high interest rates, it will take about 15 months to make the unemployment rate start.The United States is currently only one year before the starting point of raising interest rates, and even high interest rates have not arrived. Naturally, it is impossible to see the phenomenon of weak prosperity and rising unemployment rate.

Besides, monetary policy transmission is not only lagging, but its impact is also "non -linear", that is, the initial impact is mild.The impact of the economy will increase after some time, and then gradually slow down.For example, some industries that depend on leverage can rely on the cheap borrowing funds and savings to maintain profit in the early days of interest rate increases., Then layoffs to reduce costs and increase the unemployment rate, consumption and inflation fall.

From this we can see that if the market still maintains toughness in the current US economic data, it will take lightness to the effect of this round of deflation monetary policy, and unexpected crises may continue to emerge.Just like the SVB of the Forbes Magazine was rated as one of the best banks in the United States for five consecutive years in February this year.However, this conservative asset allocation has raised interest rates in a short period of time. The long -term bonds have high interest rate risks and prices fall, which causes a large number of unrealistic loss of assets.Under the gradual appearance of the currency tightening, the excessive customer nature of the customer and its simultaneous increase in the demand for funds greatly increased, triggering the crisis of insufficient liquidity, and forcing SVB to sell huge amounts of assets with huge amounts of losses.It is not just that the loss of losses has led to the psychological crowded by customers and eventually declared bankruptcy.

In any case, the super loose currency environment of the financial tsunami has so far, and the lag of monetary policy has made the impact that can easily cause the currency tightening effect to cause the impact.However, with the gradual improvement of the US labor participation rate in the second half of this year, the time when the employment market and salary growth have slowed down, the excess savings are exhausted, and the tightening of the fermentation of the monetary policy is coming.Be careful.