RANGE: global investment focus will shift to emerging markets | Powell | US economy | global economy


  Text / Sina Finance opinion leaders (micro-channel public number kopleader) columnist Cheng Qian Zhi Chun real "Everything OK, benefit managers, Taipei, is not conducive to managers of waste。
"The beginning of the outbreak of the crisis in a decade, when he was Fed Chairman Ben Bernanke advocated 'courage to act', emphasizing the central bank should withstand external pressure and decisive action。
Among the ten years of crisis, former Federal Reserve Chairman Xi Yelun was undecided, resulting in monetary policy "Ming tight loose" loose Aftermath existence now。
Ten years on the occasion of the crisis subsided, the debut February 27 to March 1, the new Fed Chairman Powell show hawkish stance to raise interest rates, marking the Fed's action to regain the courage, the pace of monetary policy normalization will not slow down。
  We believe that Powell's hawkish stance to raise interest rates, both on Yellen's dovish bias correction reason, it is strong support for supply-side reforms of the United States, is expected to further consolidate the endogenous dynamics of US economic recovery。
For the global market, the Federal Reserve raising interest rates hawks confirmed and strengthened the real general recovery trend of the global economy, will accelerate global investment shift the focus from the real economy, money illusion, turned to emerging markets from developed countries。
  Hawks hike is rational Yellen dovish bias correction。
2018 Nian February 27 to March 1, Federal Reserve Chairman Powell completed in the coming congressional hearings in the first show, the release of two key points: first, the US economic outlook remains strong and is expected to further gradual rate hikes, reduction plan table It will also be upheld; second, the recent market turmoil is not worth worrying about, and will not affect the process of normalization of monetary policy。 The move demonstrates the formal policy stance Powell hawks hike。 From the long-term policy context, we believe, Powell resisted pressure to adhere to market fluctuations hawks hike path, is rational and courageous choices, to speed up the repair Yellen dovish bias of far-reaching Aftermath。
  According to "double-spread model" We had proposed, former Federal Reserve Chairman Xi Yelun-led process of normalization of monetary policy is divided into two very different stages merits (see attached)。   Since mid-2017 the US hawks to raise interest rates, "the first layer spreads" substantially narrowed first stage is 2015Q4-2017Q1, Yellen hesitate to short-term fluctuations in the job market, and the choice dovish rate hike。 In the meantime, the first layer spreads (the nominal natural rate of interest – policy interest rates) rise, not fall, indicating that raised policy interest rates rise significantly behind the natural rate of interest and the level of inflation, leading to tightening of monetary policy may seem, but true loose degree but higher than the average from 2013 to 2014 every year, the structural problems and the risk of a bubble in the US stock market in the US economy and thus significantly increased。 The second stage is to 2017Q2 Yellen departure, with the March 2017 Federal Reserve to raise interest rates to accelerate the open, the first layer spreads rapidly to low stage, while US economic growth remain high, suggesting that monetary policy thanks real speed recovery phase of normalization, the US economy to gradually get rid of the money illusion, into healthy。 However, the latest data from 2017Q3 to see, the first layer spreads have not completely disappeared, and there are signs of a slight rebound, indicating that monetary policy has not been fully return to a neutral level, and driven by the strong economic recovery, interest rates may rise again naturally leading raised policy interest rates。 It can be seen, Yellen's dovish policy bias Aftermath pending further clear, although the degree of monetary policy easing sharply weakened, but did not open a substantial tightening, so Powell insisted on the interest rate hawks still necessary。   Hawks hike is strong support for supply-side reforms of the United States。
Ten years after the crisis, to stimulate the demand side has bottlenecks, supply-side reform has become the fundamental driving force of the current round of global recovery。
As we have previously stressed Institute, the US economy supply side reforms follow the "feet mode": on the one hand, the normalization of monetary policy by the Federal Reserve, gradually digestion structural distortions caused by monetary easing in order to optimize allocation of factors; on the other hand, Trump invested by the government to promote structural tax reform, stimulate the private sector, foreign capital flows and further development of the manufacturing sector, so as to enhance productivity; final by two aspects together, to boost total factor productivity and achieve economic recovery in the long-period (see attached)。   "Bipedal mode" supply side reforms of the United States in mid-2017 review, the interest rate hawks supporting role for the supply side reform has begun to show。
The first, in 2017, the United States continued Beveridge curve shifts inward, the labor market has shown signs of improving allocative efficiency trend (see attached)。
  2017 January-December US Beveridge curve shifts to the inside for a second, as the hawks raise interest rates in 2017 to replace the doves to raise interest rates, the US total factor productivity and labor productivity both bid farewell to negative growth and return to positive growth track ( see drawings)。
  2017 US total factor productivity and labor productivity regain positive growth in which labor productivity continued to rise in 2017 has laid a solid foundation for salary increases, since June 2009 to promote a new high in January 2018 the US average hourly earnings year on year growth rate hit。 Currently, due to the prolonged stagnation of the original Trump tax reform has been adopted, the normalization of monetary policy as another foot of supply side reforms, but also the need for timely follow-up, taking advantage of the。 In this context, Powell's hawkish policy decision at the right time, will effectively consolidate the endogenous driving force of the US economic recovery, support continued to improve labor productivity and total factor productivity。 In view of this, we judge, US payroll growth in 2018 and inflation is expected to achieve the shift hub。
  Hawks hike is conclusive evidence of widespread global real recovery strengthening。
From a broader global perspective, Powell panic in February this year, the global market volatility, further validates our previous research assertion that the current round of global market systemic adjustment is a real baptism of recovery, in essence, is beneficial to health It is conducive to the good long-term global investment。 Looking to 2018, we maintain the Fed to raise interest rates three times in the same judgment standard。
We believe that continuing to promote the Fed hawks hike will further confirm and strengthen the real general recovery trend of the global economy, and enhance the remodeling of this trend on global markets。   First, the US stock market momentum shift。
Under the influence of hawks rate hike, though hardly the end of the bull market in stocks in 2018, but the upward momentum from money illusion switch to real economic recovery。
Market farewell "liberal paralysis" since the crisis, again began to focus on the real economy of the short and long term risks and opportunities。
Thus, US stocks rose marginal power will be weakened, while market volatility will be back up to normal, gradually release the loose foam left Yellen period。
Second, the global investment focus shifted。 2018, due Tuisan money illusion, the power shift in US stocks and global economic diversification once again rising tide of economic growth faster, richer vitality of emerging markets will continue to get the favor of international capital, global investment focus shift from developed countries to emerging markets。