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Pigeon Queen Yellen character starring, low interest rates will remain for some time

June 27 Federal Reserve Chairman Yelun published a public speech in the UK. In contrast to her speech in mid-June after the policy statement, Yale's view seemed more cautious and dove. During the Yelun speech, the dollar index further widened the decline and the refresh day was low.

Tuesday (June 27) New York time, Federal Reserve Chairman Yellen in London to participate in the "Global Economic Affairs" talks. Yelun made public remarks at the talks. In this meeting, Yale mainly on the banking system and the financial system security issues expressed views. But the market is more concerned about Yale's view of the US economic outlook.

For the view of Yale on the economic outlook, compared to her speech in mid-June after the policy statement, Yale's view is more cautious and dove. Yale believes that the Fed's rate hike and shrinking table will be gradual, she said that the US productivity growth slowed down, the actual income stagnation, inflation expectations have declined, so low interest rates will remain for some time.

During the Yelun speech, the dollar index further widened the decline and the refresh day was low; the euro rose against the dollar, and spot gold rose $ 4.

First, the Federal Reserve Chairman Yelun on the US economic outlook published a partial dove view

The economic outlook, Yelun pointed out that the US productivity growth slowed down recently, for half of the US people, the actual income stagnant. Flexible working arrangements like Uber have reduced labor participation.

Inflation, Yelun pointed out that residents' inflation expectations have declined. Many officials of the Fed believe that low unemployment is helping to promote inflation, hoping to avoid inflation is too low to become deep-rooted. The Fed is committed to maintaining price stability, but does not want the Fed policy to hurt other countries.

In terms of interest rates, Yellon noted that there is reason to believe that low interest rates will be maintained for some time. The market is well expected to the Fed step by step rate hike path. The Fed usually sees zero as the lower limit of interest rates, and we do not aim at asset prices.

For the table, Yellen explained that the Fed's plan on the table has not yet caused any adverse reaction.

Second, the Fed Yale said the banking system and the financial system more secure

In terms of the banking system, Yale said the banking system was healthier and safer, with strong US banking and plenty of liquidity. Recent stress test results show that large banks' capital positions are now more robust and better able to withstand shocks. The Fed is trying to use the reverse thinking in the process of discovering the risks, and each financial crisis has the same characteristics.

Yellon pointed out that the banking industry is developing a more sensitive model of risk. In terms of capital requirements, there is too much emphasis on risk weights; they do not perform well in building models; rather, the underlying model reduces the capital that the banking industry should hold.

The financial system, Yelun said that although it can not rule out another crisis, but the financial system greatly improved security, Yelun does not think the recent crisis will occur, to relax the financial regulation will not be a good thing.

Yale pointed out that during the 1980s and the financial crisis, the economy survived. Our regulatory system is still expected to go on, behavioral economics offers a lot of insight and contributes to policy innovation, and social ecology may help to understand the economy and spawn a more wise policy.

Yale also talked about the Fed's analysis of economic instruments and models, Yale said the Fed uses a series of different models to analyze the economy, the Federal Reserve System (FRB / US) is our main model.

For the Fed's economic expectations, Yellon pointed out that the Federal Reserve to use a variety of tools to do the expected, rather than only a model, the Fed analysis is also concerned about the views of business and family liaison.