The Fed should consider raising interest rates gradually 下北glory days

The Fed should consider raising interest rates gradually Sina North American columnist Wei Xin low interest rates for the time being did not substantially spawned the real estate bubble. In the premise of financial cost does not become a heavy burden of the enterprise, so that the base rate gradually return to the historical average, the Fed’s attention back to inflation, and improve the task of economic return to the market, should be an important means to prevent financial risk. The Fed should consider raising interest rates in the near future, the Fed will raise interest rates in September, the conjecture in the U.S. investment banks and financial institutions caused a lot of controversy. Goldman Sachs believes that in August 151 thousand of new payrolls data is sufficient to allow the fed to decide on the interest rate hike at the meeting of interest rates from 20 to 21 on the second. Morgan and Stanley believes that although the job market has been greatly improved, but the inflation rate is not enough to constitute a major interest rate hike. On the other side, debt King gross and his old club also had a dispute. Gross believes that the interest rate hike in September is almost one hundred percent determined. The PIMCO believes that the interest rate hike is unlikely to occur. Indeed, in theory, whether the central bank interest rate hike is not directly related to the job market. The role of the Fed as clear as noonday in writing their main task is to fight inflation. But in the wake of the 2008 financial crisis, policymakers have argued that monetary policy, not fiscal policy, would be less offensive to the public and easier to get through in parliament. Therefore, the Fed’s quantitative easing and the subsequent increase in interest rates in the decision, the labor market improvement and inflation as the main consideration, and increased market closer communication. First of all, from the labor market, while the employment compared to a few years ago the employment has been greatly improved, but the long-term worries still exist. Overall, the unemployment rate has remained stable at around 4.9% for about a year, slightly above the level before the financial crisis of 2008. In contrast to several economic recoveries in the past, the unemployment rate is relatively low. The monthly initial jobless claims and non-agricultural employment index although due to seasonal reasons with height, but most of them continue to improve. Business owners began to find it increasingly difficult to find qualified workers. U.S. jobs have reached a record 5 million 870 thousand in July. Theorists believe that the unemployment rate at this stage shows that the labor market is close to full employment. But if we look a little further, the profitability of US firms has continued to decline over the past year, reducing the potential for further improvements in the labour market. Standard & Poor’s 500 listed company’s earnings have been substantially lower than a year ago. The average profit margin has fallen from about 9% in the first quarter of 2014 to around the current level of about $8%. And the continued decrease in cash on the balance sheet. Most companies do not use cash to increase capital expenditure, and put into production. They choose to use a one-time stock repurchase, rather than dividends. We can also assume that executives are not optimistic about the prospects for the future, so they give the money back to investors, and to avoid giving investors a return on future investment will grow for a long time相关的主题文章: