The seemingly honest, gentle-spoken Federal Reserve Chairman Powell is finally getting tough!

On the evening of March 25, Beijing time, Federal Reserve Chairman Powell said in an interview with NPR that as the economy improves, it will gradually reduce the number of Treasuries and mortgage-backed securities purchased. And withdraw the support provided during the emergency when the economy has almost fully recovered. As soon as this remark came out, it immediately triggered an across-the-board plunge in the European market, and the three major futures indexes of US stocks also fell sharply across the board.

Shortly after that, the United States released its economic data. In the fourth quarter of last year, real GDP in the United States rose 4.3% on an annualized basis, and the number of initial claims for unemployment benefits in the week to March 20 in the United States was 684000, both of which were better than expected. After the release of these data, the dollar also began to rise, the recent dollar index continued to rise, the dollar has returned to the local land momentum. So is the global liquidity gate quietly closing? What will the people's Bank of China do?

What did Powell say?

Federal Reserve Chairman Jerome Powell said Thursday that strong financial aid from Congress and accelerated vaccine distribution have made the U.S. economy recover faster than expected. To some extent, this will enable the central bank to call back the help it has provided, although he says now is not the time.

Powell spoke about it in a live interview.NPR"as we make greater progress in achieving our goals, we will gradually reduce the number of Treasuries and mortgage-backed securities we buy," the Morning Edition said. Over time, we will gradually achieve transparency and withdraw the support we provided in times of emergency when the economy recovers almost completely. "

"As we make substantial further progress toward our goals, we'll gradually roll back the amount of Treasurys and mortgage-backed securities we've bought," Powell told NPR's "Morning Edition" in a live interview. "We will very gradually over time and with great transparency, when the economy has all but fully recovered, we will be pulling back the support that we provided during emergency times.")

'Last year's response was similar to the Dunkirk evacuation, 'Fed Chairman Jerome Powell said.' all you have to do is get on board and save people, 'said Federal Reserve Chairman Jerome Powell.' the measures taken last year achieved the goal of avoiding the worst outcome. The Fed acted during the crisis to avoid more serious damage.

As the coronavirus began to affect the US economy in the spring of 2020, the Fed cut interest rates to zero, revived large-scale asset purchases during the financial crisis and launched a series of liquidity facilities to support credit flows in several markets.

Powell says the economic outlook is improving, mainly due to progress in vaccine rollout. As the economy continues to reopen, a new round of fiscal stimulus in Congress will support jobs and a wide range of economic activity. In response to this optimism, the Fed will not immediately withdraw its monetary stimulus, adding that any rate hike or reduction in the pace of asset purchases will be carried out "gradually and transparently over time." "

As the government spent trillions of dollars on three separate coronavirus relief bills, the Fed expanded its balance sheet and injected more than $3 trillion into the economy. Powell said that in the face of the crisis, although necessary, the current fiscal practice was "unsustainable". He said low interest rates enable the United States to bear the debt burden without causing too much trouble, although Congress will eventually have to solve the debt problem. He added that the government can deal with the national debt before the economy returns to full employment and tax revenue picks up.

All-round diving in Europe and America

Stock markets in Europe and the United States plunged after Powell's voice. The three major European stock indexes all fell by about 1%, and the European Stoxx 50 index fell more than 1% at one point. Then improved, as of 11:00 Beijing time on the 25th, the European Stoxx 50 index fell 0.51%. Judging from the current situation, among the major developed countries, only the UK and EU central banks have not made hawkish statements, while the central banks of the United States, Japan, Canada and other countries have gradually stopped, and the European Central Bank has also said that it will speed up the pace of bond purchases. In fact, the epidemic in Europe has also worsened recently.

The early-stage index of US stocks also changed from rising across the board to killing across the board, of which the index of small-cap stocks fell nearly 1%.

Us stocks also opened lower across the board, falling even more than the futures index.

Some analysts say billions of dollars will flow from equities to bonds by the end of March as big investors move money to balance their portfolios. In fact, after Powell's voice, U. S. bond yields did not perform amazingly, but continued their previous performance.

Major economic data in the United States beat expectations, with 684000 initial claims for unemployment benefits in the week to March 20, compared with an expected 730000, compared with a previous value of 770000. In the fourth quarter of last year, real GDP in the United States rose 4.3% on an annualized basis, with an expected increase of 4.1%, and a 4.1% increase in the previous value. This may have reinforced market expectations of an exit from loose monetary policy. The dollar index also rebounded after the release of major economic data. As of brokerage china's press release, the dollar index was at 92.80, up 0.23% on the day, setting a four-month high.

Since Powell took office, he has been known as a dove and has rarely spoken hard words before. Although Powell was often reluctant to respond to the demands of former President Trump, he basically did it in the end, and the market responded with a "rising voice." However, ultra-large-scale water release cannot last forever, and extraordinary measures in extraordinary times are bound to withdraw one day. The market should say that there are full expectations for this, but everyone may think that "this day will not come so soon." One of Powell's "tough words" may reverse this expectation more quickly.

How does the people's Bank of China move?

At a time when the world's central banks are ready to move, the prepared central bank of China is calm. Monetary Policy Committee of the people's Bank of China2021First quarter of # (total92The regular meeting is held at3月24It will be held in Beijing on the 1st.

The meeting analyzed the economic and financial situation at home and abroad. The meeting held that since the beginning of this year, we have persisted in co-ordinating epidemic prevention and control and economic and social development, and economic operation has continued to recover. Prudent monetary policy maintains continuity, stability and sustainability, scientific and effective management is expected, necessary support for economic recovery is maintained, financial risks are effectively prevented and controlled, and the quality and efficiency of the real economy of financial services are gradually improved. The dividend of the reform of the quoted interest rate in the loan market has been continuously released, the efficiency of monetary transmission has been enhanced, the loan interest rate has fallen steadily, the RMB exchange rate has been generally stable, and the flexibility of two-way floating has been enhanced, giving play to the function of macroeconomic stabilizer.

The meeting pointed out that the driving force of domestic economic development is constantly increasing, and positive factors have significantly increased, but the process of economic recovery is still uneven, the epidemic situation abroad and the world economy tend to improve, but the situation is still complex and grim, and it is necessary to strengthen the research and analysis of the economic situation at home and abroad, strengthen the coordination of international macroeconomic policies, concentrate on doing a good job in our own affairs, do a good job in cross-cycle policy design, and support high-quality economic development. A prudent monetary policy should be flexible, accurate, reasonable and moderate, grasp the timing and effectiveness of the policy, maintain reasonable and abundant liquidity, keep the growth rate of money supply and social financing scale basically in line with the nominal economic growth rate, and keep the macro leverage ratio basically stable.

We will improve the formation and transmission mechanism of market-oriented interest rates, improve the central bank's policy interest rate system, continue to unleash the potential of reform to promote the reduction of lending rates, optimize the supervision of deposit rates, and promote a further reduction in real lending rates.

We will deepen the market-oriented reform of the exchange rate, enhance the flexibility of the RMB exchange rate, guide enterprises and financial institutions to adhere to the concept of "risk-neutral", strengthen expectation management, and keep the RMB exchange rate basically stable at a reasonable and balanced level.

We should build an institutional mechanism for finance to effectively support the real economy, improve the system of financial support for innovation, build a capital chain around the innovation chain and industrial chain, and form a virtuous circle and triangular interaction among finance, science and technology and industry. guide financial institutions to increase medium-and long-term loans to the manufacturing industry, strive to ensure that financial support for private enterprises is commensurate with the contribution of private enterprises to economic and social development, and support coordinated regional development. To promote the realization of carbon peak, carbon neutralization as the goal to improve the green financial system. We will promote high-level two-way opening up of finance, and improve the ability of economic and financial management and the ability to prevent and control risks under open conditions.