The Fed Resolution Is Coming Soon. QE'S Curtain Call Has Attracted Much Attention.

With the approaching of the Federal Reserve meeting early this morning, investors' nervousness is becoming more and more evident. The market generally expects that it will announce the complete closure of QE, and the market tends to end QE as a stop stimulus. When the global economic anxiety is heating up, will there be a big turbulence in the market structure after the end of the QE, and what kind of policy measures the Federal Reserve will take next? All of which will focus the market on the QE.

The $3 trillion QE will call the curtain.

The Federal Reserve cut interest rates to near zero in the financial crisis five years ago, and obviously needs more measures to stimulate the economy.

As a result, the Fed began buying bonds, hoping to push down the often out of control long-term interest rate.

This is not a new move, but it has never been as large as it has been in the past five years.

The Fed has injected more than $3 trillion into the bond market over the past five years to boost economic growth.

The Fed has cut QE for 10 billion months in a row for seventh consecutive months, cutting the monthly QE of 85 billion dollars to the current 15 billion US dollars a month. The QE3 of the Bernanke era ended in Yellen's hands, and how the global financial market will react is very anxious.

Basically, since the beginning of QE1, critics have begun to warn that this will push inflation up sharply, but at present, the price of the US is still lower than the 2% of the Federal Reserve's health level, but the stock market and the real estate bubble are constantly expanding.

Emerging market currencies and stock markets tumbled in mid January, as investors prepared for the fed to raise interest rates, but then rebounded, as Yellen promised the market that the Federal Reserve would keep interest rates low for a long time after the end of QE, and promised Congress that more work would be needed to boost employment in the us.

Yellen once said that the pain of savers' low interest rates offset the policy's help to the job market and the overall economy, but at the same time, she said, QE would not last forever.

Since the QE cut this year, the global market has not been shocked, but the stock market, exchange rate and bond market have been steadily pushed down to a record low.

The initial expectation of the Fed is to

Gradually cut, but will continue to support the economy, but the market will soon cut the QE and exit loose policy mixed into one, and how to make the market to reverse the views and appease the market, will be the test of the Federal Reserve.

Will the Fed act differently?

The two day policy meeting will begin later on Tuesday. It is almost certain that the Federal Reserve will announce the end of its quantitative easing policy at the end of the conference and confirm that it is willing to wait for a long time to raise interest rates again.

The market was sluggish before the Fed's monetary policy meeting this week.

The current focus is whether the Fed will again express its patience with raising interest rates. After the last interest rate decision, the Fed's meeting minutes expressed concern about the possible drag on the US economy and the market has also been greatly affected by the global economic slowdown.

Data released yesterday showed that the US service industry slowed to a six month low in October, and the housing market data was also weaker than expected, indicating that the growth rate slowed down in the early fourth quarter.

Weak data solidify market expectations, that is, the Fed's willingness to placate the market, suggesting that even if the end of the massive debt buying stimulus is ended, the rate hike is still far away.

Announced on Monday

The performance is worse than expected, which has undoubtedly increased the patience of the Fed. The exchange market's response to the economic data is obviously stronger than that of the stock market. The US dollar has been suppressed by the economic data, and the non US currency has rebounded comprehensively. Although the German economic data is also weak, the euro still rebounded.

In September, minutes of the Fed meeting showed that some Fed officials had begun to pay close attention to the possible negative impact of the US dollar's continued appreciation on the US economy.

Officials say inflation in the US may be subject to double negative pressure caused by imported deflation and the appreciation of the dollar.

The meeting highlights that there are still significant resource vacant conditions in the US job market, and many officials believe that the Fed's earlier estimate of interest rate hike is more radical than market investors, but the consequences of over aggressive policies on easing policy may be more tardy than action.