The US Federal Reserve Is Afraid Of Losing Track Of Gradual Increase In Interest Rates.

Federal Reserve policymakers will hold meetings on Tuesday (January 26th) and Wednesday for December.

The first interest rate conference since then.

According to foreign media reports, the stock market value has evaporated about $2 trillion and 500 billion in the past three weeks, and consumers may reduce their spending, which may leave the Federal Reserve from a gradual increase in interest rates.

The Fed is not expected to take action this week, but investors will carefully study the post meeting statement to see what impact the recent events have on the prospects of raising interest rates.

Analysts pointed out that the longer the market lasts, the bigger the risk will be for the main engine of US economic growth - the greater the risk of household spending.

Fed research and other studies estimate that when household net worth shrinks, the pmission effect will be as high as 6% and lead to reduced expenditure.

This means that unless the market starts to rebound soon, consumption will shrink by as much as 150 billion dollars in the next few months, which will be a drag on GDP's close to 1%.

Since last time

Since the meeting, oil prices have fallen to several new lows, and global stock markets have suffered the worst start in history. Several Fed officials also expressed concern that the recent decline in US inflation expectations could hurt family and business confidence.

By the end of last year, the personal savings rate had only increased slightly, and it was 5.6% of personal disposable income in November, higher than the mean of 4.8% in 2013 and 2014.

This may mean that consumers are returning to a cautious mood. This cautious sentiment is also evident in the initial stage of recovery from the 2007-2009 year recession in the United States, when American families focused on repairing.

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The Oxford Economics recently estimated that a 20% plunge in global stock market since May will bring the US GDP to nearly 2% below its normal level by the end of next year, and wipe out nearly half of the basic growth rate predicted by the Fed.

Fed officials usually downplay the importance of market volatility, which is basically not related to monetary policy unless the volatility is too large to impact investment, recruitment or household expenditure.

But according to authoritative experts, the wealth effect of the continued decline of the market will largely weaken the current growth rate expected by the Federal Reserve, which may be true.

In addition, other indicators of consumer spending have begun to turn flat, or suggest that families may be able to cling to their purse strings.

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On Monday (January 25th), the Australian dollar and New Zealand dollar remained stable in the Asia Pacific region, and worries about global economic growth suppressed further gains. Last week, the two currencies rebounded against the US dollar in 7 years.

The Australian dollar / US dollar remained stable near the 0.7000 line in the day, reaching a maximum of 0.7044 last Friday, and then faced strong resistance near 0.7050.

It rose 2% last week, the highest gain since October.

On the last trading day, the Aussie dollar was above the 83.15 line, and jumped 3.4% last week, while the exchange rate in mid week reached a low level since mid 2012.

Although the global stock market has expanded, the foreign exchange market has become more cautious.

The Commodity Futures Trading Commission (CFTC) data showed that the speculative Australian dollar short positions increased to 81738 in January 19th.

The Australian dollar (ANZ) said that the Australian dollar suffered a net sales of $900 million, making the net short positions total $1 billion 900 million.

Traders say the market is still expecting bad news, especially in the commodities market and China.

Financial markets show that the RBA has cut interest rates to 1.75% of its record low by 80% before May. The market is worried about the economic situation in China and the economic growth prospects of Europe and Japan.

At present, the NZD is stable against the US dollar near the 0.6520 line, and the market is concerned about the New Zealand Federal Reserve (RBNZ) interest rate decision on Thursday (January 28th).

It is widely expected that the New Zealand Federal Reserve will maintain interest rates unchanged, but most analysts expect the tone of the statement to indicate continued interest rate cuts in the future.