At the next meeting of the Federal reserve system (FRS) the USA, which will be held September 17-18, may be decided to reduce or even terminate the programme of support to the national economy. About possibility of such decision said already, three of the twelve heads of the Federal reserve banks of the USA, forming the fed, Dallas, Chicago and Atlanta.
In the third round of quantitative easing, the fed buys long-term government bonds and mortgage securities by $85 billion every month, and experts fear that the cessation of this practice will bring down the developing economies (such as Russian), causing capital outflows, rising interest rates, triggering a "currency war".
100% certainty that Americans as early as this September will cancel the program, Russian experts have no. The chances are estimated as 50 on 50. "Crossing swords about the expected impact of QE3, we must remember that in the market forces of rapids and whirlpools to which we are steadily approaching, a decision on the tapering of stimulus is, albeit important, but only one of the stones. And the folding can be performed in very different modes. Including to do it as gently and comfortably to the financial system, and that trying to make the fed", — shared his opinion with the "Rosbalt" head of the analytical Department of the IR "Zerich capital Management" Nikolay Podlevskikh.
Markets react very nervously to the slightest of statements about the possible abolition of QE3 and no less violently happy when it becomes clear that the decision be postponed. Traditional markets ' reaction to tapering of stimulus: a sharp drop in indices, stock quotes, the cost of oil and metals contracts. The consequences of this, I'm sure the Deputy Director of analytical Department of company "Alpari" Daria Zhelannova, you will also experience the markets throughout the world, including Europe and Russia. However, she believes that after a strong fall will be a correction. "The recovery of the American economy will go in the end through gradual increase in rates, further promotion of inflation to a comfortable value (2-3%) and promote economic growth," she said "Rosbalt".
According to her, the US would remain two unsolved problems: national debt and budget sequestration. Final decisions on these have not yet been adopted. Analyst FIBO Group Pavlos Kotidis believes that we should expect a decline in GDP growth of the USA after the abolition of quantitative easing program.
For Europe, the analyst believes that the tapering of QE3 will be more emotionally negative, but this situation will be short-term, as the Eurozone itself gets in the way of recovery. There may be slight disruptions to exports, but it is not critical.
The main headache for Russia is the inevitable decline in the stock markets, prices on oil and gas. It would require a long chain of problems, such as decreased stability of the Federal budget, the inevitable cuts in social spending and, as a consequence, the threat to image of power, as if the fall in oil prices will be protracted and deep, the state simply has no money left to fulfill all his promises. Perhaps in this situation have to question the expediency and too much military spending. Russia now ranks third in the world in military spending (about $69 billion) after the US and China. Perhaps this allows Russia to play still a prominent role on the world stage, but has a negative impact on economic growth.
There is an indirect threat is the oppression of European exports to the U.S. after the abolition of QE3. No matter what rant said now about the development of trade relations of Russia with Asia, Europe remains the largest trading partner of the Russian Federation. And if its exports will stagnate, decrease, and the supply of goods from Russia to the EU. Pavlos Kotidis also believes that the abolition of QE3 could trigger further devaluation of the ruble to the existing 11%, which since February of current year has devalued the national currency, will add another 4-5%.
If we assume that the 2009 crisis is still ongoing, it may go down in history as one of the longest periods of stagnation, during which there were no decisions taken about meaningful reform of the world economy, and the authorities of many countries were just off ukachivanie money in the national system. The lengthiness of these measures over time has caused the effect of habituation, I'm sure the chief of the division of investment management and analytical support IFK "solid" Michael Korolyuk. "We think that the quantitative easing program – a common phenomenon. This is not so. Therefore, their phase-out will mean a return to normal times when the economy could grow by itself, without props. This is the appearance of internal lifting force, and can offset the effect of cancellations. Here, of course, it is not only skill – the art of governing, which has the spinal cord to experience internal processes and agree on the pace of tapering with newfound economic strength," he said "Rosbalt".
However, due to the fact that the practice is quite far from the theory, at the exit from the crises often have a wave of inflation because time does not dredged from the market surplus cash liquidity. "Probably, this time will be the same – the economy will grow faster, despite the collapse, inflation to accelerate," said he.
Tags: assessment , USA , economy , crisis