After the European Central Bank (ECB), it's time for the U.S. Federal Reserve (Fed) to dive into the arena. The Central Bank of the United States met on Tuesday FOMC's Monetary Committee. Supposed to be, usually, a meeting classic, this appointment has turned the eyes of the financial world in crisis meeting. It is indeed the first time the Fed meets in public since the beginning of the financial crisis and especially his first public speaking since the deterioration of the financial rating of the United States by Standard & Poor's.
Not surprisingly, it has maintained its key interest rates between 0% and 0.25%. However, she said that this policy would be extended "until mid-2013," sign it receives considerable stress on growth. In fact, she says, "the risks to the economy rose" and growing "considerably slower than expected."
Other measures
"The Fed is playing a tough game with the words, it must show it is taking the situation seriously, without making too much not that the markets are worried about a return to recession," said Philippe Bruneau, Director central bank Neuflize OBC. For the latter, "the only good news for the current crisis is the drop in oil prices, which dropped below the 80 dollars a barrel after reaching $ 115 in the spring. A decrease of $ 10 is equivalent to 0.3 percentage point of growth in addition to the United States. " It is not certain that the message of this evening of the Federal Reserve reassured. Especially since three members of the Monetary Committee voted against the decision to keep rates from 0 to 0.25% until 2013.Evidence that the division now also prevails in the central bank.
Taking note of the slowdown in action, the Fed said "consider further steps to promote stronger economic growth." But without saying more. "Ben Bernanke was forced to send a message to investors and told them that he will continue to support the price of U.S. government bonds, weakened by the S & P's decision," said Antoine Brunet, director of AB Markets.But by not precise commitments, Ben Bernanke shows how the scope is narrow to implement this new policy unconventional.
China, the first lender in the United States which it holds more than 1.3 trillion dollars in debt, is fiercely opposed to these measures, particularly in quantitative easing, which is for the Fed to directly purchase U.S. Treasury debt. "To walk the printing press allows the U.S. to go into debt on the backs of low-cost external creditors," a summary of the economists of HSBC. Moreover, "it keeps the dollar at low levels and put pressure on emerging currencies, including the yuan." The Chinese authorities find themselves faced with an alternative: let their currencies appreciate or prevent this movement, which requires in turn create the currency.Action inconsistent with their goal to fight against inflation (see cons below). "In one way or the other, China is losing, 'the experts of HSBC. The previous quantitative easing campaign was very unpopular in China. A new one could cause actual casus belli. With the key threat by Beijing to stop buying U.S. Treasuries.