Comment: The Federal Reserve returns to the rational US dollar dual rate dual rate dua

Source: Taiwan Industry and Commerce Times

Industrial and Commercial Times Society

In the November interest rate decision -making meeting of the United States Federal Preparatory Council (FED), the federal capital interest rate target range remained at a nearly 22 -year high of 5.25 % to 5.5 %.This is also the first time that the Fed started the fierce interest rate hike loop in 40 years last March last year, the first consecutive meeting has not adjusted interest rates.

Since the financial tsunami in 2008, the world has become accustomed to the passion performance of the Federal Reserve to adjust the monetary policy, which is the economic and financial situation that the Federal Reserve is to quickly change.Interest rates, and when they are reversed, they also turn their tails quickly, turning to dense interest rate hikes.

Because of this, when the Fed has not moved for two consecutive times, and even in December, it is estimated that the market may not move in December.It also shows that the market is going to look at the Fed's policy direction.

Of course, this talks with the Federal Reserve Chairman Powell from the previous cutting iron to the tone zone.Taking the press conference after the Federal Public Marketing Committee (FOMC) decision -making meeting as an example, Powell used the word "careful" to emphasize that this wave of interest rate hikes has "made significant progress", but it has not expressed whether it has defeated the inflation.Essence

According to Powell, the Federal Reserve is committed to implementing a "sufficient restriction" monetary policy to benefit the goal of 2 % of the long -term inflation rate, but "has no confidence" for whether it has reached the position; but he also mentioned thatIt is incorrect to think that the concept of raising interest rates after a regular meeting is incorrect.

Compared with previous clarifications, why did the Fed's attitude turn ambiguous?The most important reason may be that the Fed wants fish (stable prices) and bear's paw (economic growth), but radical monetary policy is bound to sacrifice one of them, so that the Fed must change the middle route.

From the PCE price index of personal consumption expenditure (PCE) with the Federal Reserve decision -making preferences, the core inflation rate in the United States in September fell to 3.7 %, which was lower than the level of more than 5 % last year, but 2 % of the Fed's expectations was stillThere is a small distance.As for the third quarter of the domestic GDP (GDP), the annual rate of 49 % shows toughness.

When the inflation is severe, the Fed has no choice but to raise interest rates with tough means. Similarly, if the economy has severely declined, the Federal Reserve will inevitably take various loose measures.The current situation is the level of "dissatisfaction but acceptable" regardless of prices or economy, and the Federal Reserve's ultimate ideal is soft landing. Watching is indeed the best choice.As for another reason that the Federal Reserve must be cautious but unable to speak, it is the effect of leading and pricing in the past monetary policy, but the market may not follow the Federal Reserve, including 10 -year US debt, which still breaks through the level at 5 %.Hidden hints that the tightening of the financial and credit situation may suppress economic activities, recruiting and inflation.

Overall observation, the Fed's follow -up policy trend will rise from the past in the past.The US dollar interest rate is unlikely to suddenly down, but it will maintain a short time in the altitude.

At the same time, the market should not imagine that the US dollar and the US debt will be stable. Among them, the interest rate of US debt in two years has remained high. The 10 -year US debt has also risen by nearly one percentage point since the end of July.Make interest rates such as mortgage and car loans rising simultaneously, and subsequent U.S. debt trends are still the focus of observation.

Another thing that must be noted is the US dollar index. From the beginning of 2022 to the end of October this year, the US dollar index has risen 11.6 %. If the US dollar index has increased by 18.72 % in the past three years, the current US dollar index is still above 106 or more.If you have a relatively high point, you can find that the status of a strong dollar should be difficult to shake in a short period of time.

After the Japanese yen fell below the 150 yen psychological level, it lost 151 yen on November 1st; NT $ on November 1 was also offensive and defensive at a price of 32.5 yuan.EssenceSince the start of interest rate hike last year, the NT $ 14.76 % has so far, which has increased by the US dollar index in the same period.

In contrast to the recent performance of the major currency against the US dollar, except for the yen that has been weak to no one, the Korean Mall and New Taiwan dollars have been on the trend of the US dollar. As for the euro's depreciation of the US dollar since the United States launched interest rates, the amplitude is far away, but the range is far away.Smaller than NT $ and won.

This result will appear, in addition to the intensity of collecting monetary policies from various countries, another influencing factor is the difference in the economic and trade structure.However, regardless of the reason, the conclusion is "US dollar strong", and the US dollar interest rate is still rising or not, it can be expected that the US dollar dual -rate dual high will become the new normal.

In addition to manufacturers' response to high interest rates and strong US dollars, the central bank of Taiwan must pay more attention to the impact of this new normal on the financial market and prices.The Fed wants to be all the best of both, taking into account the economy and prices, the central bank will inevitably face the dilemma of stable exchange rate or the economy, especially the high economic export orientation of Taiwan. The disadvantaged exchange rate is not good for prices.The Taiwan dollar has no strong capital.

The intervention rate can only cure the standards and cannot cure the root cause. Under the current Taiwan -US interest spread, if the central bank of Taiwan wants to stop the New Taiwan dollar to stop falling, the fundamental way is to continue to raise interest rates, but in this wayStrike, how to take the two harm between the two harm between the dysfunction and possible input inflation pressure, and the central bank must think twice.