Federal Reserve to maintain prudent monetary policy

Federal Reserve to maintain prudent monetary policy Market expectations of Fed monetary policy will continue to maintain a cautious approach, coupled with the recent U.S. economic data is not ideal, the dollar index continued to weaken. MBT Shoes UK The Fed recently announced in January monetary policy meeting showed that Fed officials on the U.S. economic recovery, growing confidence, but the pace of recovery is still not enough to quickly pull down the unemployment rate. Downside risk facing the economy has decreased, is expected to increase the unemployment rate will decline only slowly. Decision-makers that the recent data did not make it significantly change the economic and inflation expectations. Records also show that part of the Open Market Committee members for the Treasury purchase plan could have the effect not very determined, but said the change of plan at the moment is not appropriate. The Fed reiterated that the economic environment may be expected to remain very low for the benchmark federal funds rate to justify a longer period of time. In recent weeks, Dallas Fed President Fisher and Philadelphia Federal Reserve Chairman Xipuluosuo shown on the second round of the quantitative easing program dissatisfaction. But they said until the end of June 2011 the second round before the end of quantitative easing program would not open a formal objection to the plan. At the same time, although a lot of data from the U.S. economic recovery is picking up speed, economy into further reduce the risk of a double-dip recession, but the U.S. housing and employment market is still in an unstable state, especially the U.S. unemployment rate is still high at 9.0% expected the Fed in monetary policy will continue to maintain a cautious attitude, which weighed on the market the Fed is expected to reduce the size of quantitative easing. Bureau of Statistics data showed the UK, the United Kingdom in January CPI rose by 4.0% per annum, the highest since November 2008 the maximum annual increase. UK CPI increase over the third consecutive year, more than 2.0% of the Bank of England set the target level. In the face of strong inflationary pressures, the Bank of England Governor Mervyn King had to make a shot when necessary to curb inflation stance. At the same time, the Bank of England Monetary Policy Committee Sentai Si, said the CPI back down to target levels, and the need for faster than expected to raise interest rates. Widely expected the Bank of England may raise interest rates more members to support the camp. Citigroup said the Bank of England raising interest rates in 2011 or three times, had expected to raise interest rates twice. Bank of England rate hike as early as in March, but the first time to raise interest rates very uncertain. Recently, traders said, the European Central Bank to buy the Portuguese government bonds shot, followed by Portugal, bond yields and bond yields narrowed Germany. European Central Bank President Jean-Claude Trichet said that inflation expectations remain stable, but the risk of future price rise may be further enhanced. At the same time, the European Central Bank Governing Council member Ewald Nowotny said the ECB will be in response to inflation would not be soft. ECB Executive Board member Bini Smaghi said that with the increase of global inflationary pressures, the ECB may need to raise interest rates. Recent market concerns on the European sovereign debt problem has eased, the European Central Bank to gradually shift focus to inflation expectations above. This makes the market expectations of ECB rate hikes to gradually warm up. The dollar index continued falling short-term momentum, the slope is more steep. Seen from the figure, below the effective support of a recent low of 76.85 earlier this month, if the below will open a further downside. Although the hourly dollar staged a strong kinetic energy occurred in alternating movements, but the overall downward trend has not changed. The dollar index will move the market outlook is expected to launch low-impact, but the probability is not directly below, the trend will be repeated.