SMM3, 21 July: early this morning, the Federal Reserve issued a decision on interest rates in March, keeping the federal funds rate unchanged at 2.25% to 2.5%. In addition, it is expected that interest rates will not be raised this year, but once in 2020. As soon as the news came out, gold soared by $12.
Also motionless today is the central bank of Indonesia, which said in the afternoon that it would keep the seven-day reverse repo rate unchanged at 6.00%. In addition, the Bank of India said in a statement that with the reduction of uncertainty in financial markets, global economic growth has slowed, due to the reduction in fiscal stimulus measures, the decline in labor productivity and the weakening of business confidence. The US economy is slowing. European economic growth is expected to slow further due to falling exports, due to limited demand from China, weaker business confidence and continued uncertainty about resolving Brexit. China's economy has also slowed because of delays in fiscal stimulus and a lack of easing tensions in trade relations with the US. As the world economy slows, global commodity prices, including world oil prices, have also fallen. The response of developed countries to the normalization of monetary policy is often not as stringent as originally estimated, resulting in reduced uncertainty in global financial markets.
The SNB has just issued a monetary policy statement, and Switzerland also keeps the three benchmark interest rates unchanged, all of which are negative. The SNB said global economic activity had been weaker than expected in recent months. Growth has been partially curbed by temporary factors. However, the potential momentum in many advanced economies has also slowed. In some countries, manufacturing production is particularly slow.
In the evening, the Bank of England will release the interest rate decision and the minutes of the meeting, and the market is widely expected that the Bank of England will also stand still.
Recently, all the central banks in the world have been standing still, including the former Australian Federal Reserve, the Bank of Japan, the Bank of New Zealand, and so on. The countries that followed the Fed to raise interest rates last year all followed the Fed to stop raising interest rates. The world is waiting for the guidance of the Federal Reserve, the world economy is suffering a lot of damage, central banks will no longer raise interest rates! It is believed that if the Fed continues to keep current interest rates unchanged, other countries will either remain motionless, or start cutting interest rates first, and the monetary policy of the major central banks is in fact a barometer of the good or bad of the world economy. Of course, the US economy is still relatively good, the United States will not be in a hurry to raise interest rates, the dollar should strengthen to the end, which is determined by the strong resilience of the US economy. In short, the next may enter a period of black swans flying with pigeons.