From the end 2016 of the year Federal Reserve System (FED) USA held 18 meetings, on eight of them, it was decided to raise the key rate. During this time, the rate increased from 0,5% to 2,5% per annum.
This tightening policy, in other words, "Hawk" policy, didn't like the president USA Donald Trump. In recent months 2018 of the year, the eccentric president allowed himself to speak harshly against the head of the Fed, Jerome Powell. For example, Трамп называл ФРС «единственной проблемой экономики США», "Called" Powell to talk, threatened with dismissal and demanded not to raise the rate anymore.
At the meeting 30 January Fed, finally, relented and made it clear for the first time in a long time, that there will be no rate hike in the near future. Did Powell succumb to Trump's persuasion?
FRS vs. Trump
At the meeting 30 января ФРС сохранила ключевую ставку на уровне в 2,25-2,5%. На пресс-конференции после заседания FOMC (Federal Open Market Committee) Jerome Powell stated, that "the case for a rate hike has weakened" and that the agency will now "patiently assess the prospects, before adjusting our monetary policy ". Besides, Powell announced, that at the next meetings of the Fed will consider the issue of, to stop the reduction of assets on the balance sheet of the Central Bank. Программа сокращения баланса действует с октября 2017 of the year.
A change in rhetoric has taken place, first of all, due to risks to economic development, and not because of pressure from the president, experts interviewed by Forbes are unanimous. "Of course, this is due to Trump's actions, but not with pressure, which he rendered to the Fed, but with the consequences of his policy ", - thinks the president of ACI Russia - The Financial Markets Association Sergey Romanchuk.
Uncertainty is among the main risks for the US economy, associated with trade wars, government shutdown, which reduced the growth of the American economy. "Moreover, there are fears, that economic growth will slow down faster, than expected. Therefore, the Fed, in my opinion, and decided to pursue a more accurate policy ", - says an independent analyst, co-founder of GKEM Analytica Alexander Kudrin.
In defense of independence, the Fed says even then, how the leadership of the department behaved during the previous meeting, says Sergey Romanchuk. Then Trump demanded in a categorical manner not to raise the rate, which had the opposite effect on the Fed - the rate was raised. “That's when, I think, the solution was demonstrative, so that there are no doubts about the independence of the FRS from the opinion of the president ", - explains Romanchuk.
Despite the fact that the Fed did exactly that, what the US president wanted, softening rhetoric could play a cruel joke with Trump. The softer the monetary policy, the further the cyclical crisis begins, объясняет советник по макроэкономике в «Открытие Broker» Сергей Хестанов. Such a delayed crisis, in its turn, could affect the outcome of the next US presidential election. “History shows, that the leaders, which take place during the electoral period against the backdrop of economic growth, re-elected. And those, who is trying to get re-elected on a slump, do not win. Such is the fate, Most likely, waiting after yesterday's Fed decision of Donald Trump ", - concludes Khestanov.
Implications for markets
Stocks reacted to Fed statement with growth (index S&P 500 grew up on 1,6%), the dollar weakened its position against the euro. The anticipation of the Fed rate trajectory has now changed, economists say. “The market is waiting, what, maybe, there will be no more promotions during this year. At least understandable, that the Fed will act on the situation. This has a significant impact on the markets. ", - explains Sergey Romanchuk.
However, the most important thing for the markets yesterday was not the rate decision - it was expected, a statement about the possibility of adjusting the balance reduction program, believes Alexander Kudrin. “The dependence of the markets on this process is very high. Unless the Fed's balance sheet shrinks anymore, this will be a positive signal for the market. Yesterday we saw the reaction to this opportunity in the markets ”, - Kudrin believes. A halt in balance sheet shrinking is another signal of monetary policy easing, which will support the economy, agrees Sergey Romanchuk.
What growth in the markets can cause softening of rhetoric, it's hard to say yet, economists say. But the outstripping growth has already shown itself - the market began to lay down easing in prices.. “We can see a good move up in the American market., in parts emerging markets. Think, this will happen in the coming weeks ", - Sergey Khestanov predicts. If the same kind of "pigeon" statements follow at the next Fed meetings, it will only strengthen the markets, says the economist.
The Fed's decision is positive for all types of risky assets, but the rate hike is unlikely to be delayed for a full year, says senior analyst on macroeconomics "ATON" Yakov Yakovlev. In his opinion, so far we can only talk about, that there will be no changes in the policy of the regulator within six months. “If other positive factors come into play, for example, the United States will agree with China, then in the coming months it will be possible to see an increase in risky assets ", - the analyst thinks. However, there is no point in hoping for guaranteed growth in emerging markets - the situation there is highly dependent on the Chinese market., emphasizes Yakovlev.
As for the dollar, the softening of the Fed's rhetoric is negative for the American currency. But count on, that the Fed's decision will lead to a significant strengthening of the ruble, it is forbidden, economists warn. The ruble-dollar pair is influenced by completely different factors - geopolitical tensions and foreign currency purchases on the market within the framework of the budget rule..
A source: www.forbes.ru/finansy-i-investicii/371855-grabli-dlya-trampa-k-chemu-privedet-smyagchenie-ritoriki-frs
