The Federal Reserve Faces A Challenge in Its Message
The question facing Federal Reserve Board policy makers at their meeting Tuesday isn't whether to change interest rates -- they almost certainly aren't going to -- but rather how to convince markets they aren't going to raise them any time soon.
Since its May 6 meeting, the Fed has amply indicated that the world has changed and, unlike in previous recoveries, it is going to be extraordinarily patient about raising rates. That is because underlying inflation, at just above 1%, is at risk of going too low, whereas for most of the prior 50 years, the Fed thought inflation was too high.
For a while, investors were convinced of this, too, driving 10-year Treasury bond yields down close to 3%, and pushing the expected date of the Fed's first interest-rate increase to next summer.
But a breakdown in communications between the Fed and the markets and a run of upbeat economic data have completely crushed the markets' "world-is-different" view. Even though the Fed lowered the federal-funds rate to 1% from 1.25% June 25, its failure to cut it even more -- or to promise "unconventional" measures of stimulating growth such as outright bond purchases -- prompted investors to alter their expectations. Bond yields have jumped to 4.4%. Futures markets, which in April thought the Fed might be cutting interest rates by next March, now sees it raising them by then.
Either the market doesn't believe the world has changed, or it believes inflation is about to roar ahead, noted ISI Group, a New York-based economics research firm. This has led to higher borrowing costs for consumers and businesses, in particular long-term mortgage rates.
Former Fed governor Laurence Meyer said that given the bond market's recent turmoil, Fed officials "have to be very fearful here of providing information that will be misinterpreted," and they are likely to keep their message Tuesday "simple and straightforward."
Still, some change in how the Fed characterizes the balance of risks to growth and inflation -- which suggests in what direction the Fed is more likely to move rates, if at all -- is possible. Officials have called the risk statement a work in progress and indeed have fiddled with it at each of their past three meetings.
Mr. Meyer said the Fed may incorporate in its statement chairman Alan Greenspan's promise to Congress last month to not raise rates "for as long as it takes to achieve a return to satisfactory economic performance."
Unlike in June, there is now solid evidence that the expected second-half recovery is under way: business investment is increasing, and the pace of layoffs has slackened.
"The script is that consumers hold their own while businesses are finally convinced the expansion has legs and raise their own spending," said Peter Hooper, chief U.S. economist at Deutsche Bank. "We're still in the early stages, but I think that's what's unfolding."
Fed和市场的交流方式受到质疑
美国联邦储备委员会理事会(Federal Reserve Board of Governors)的决策者们在周二的会议上所面临的问题不是要不要调整利率--他们几乎已经肯定不会调整利率，而是怎样让市场相信他们不会很快就调高利率。
自从5月6日的会议以来，美国联邦储备委员会(Federal Reserve, 简称Fed)已经多次表示，世界已经改变，与前几次经济复苏时不同，此次它对提升利率将会保持惊人的耐心。这是因为目前的通货膨胀率只略高于1%，且还有进一步下降的危险，而在此前50年的多数时间里，Fed一直认为通货膨胀率过高。
一段时间以来，投资者也对此深信不疑，他们将10年期美国国债的收益率推低至接近3%的水平，并将Fed预计将再度开始上调利率的时间推迟至明年夏天。
但Fed和市场之间的沟通似乎出了一点问题，而一连串向好的经济数据已经完全粉碎了"世界已不同"的观点。虽然Fed在6月25日将联邦基金利率从1.25%调降至1%，但由于它未再进一步下调利率，也未承诺会采取非常规措施(比如大举购买国债)来刺激经济增长，投资者因而改变了他们的观点。国债的收益率跳升至4.4%。期货市场曾经在今年4月份时认为Fed将在明年3月份降低利率，而现在它认为Fed到时将会提高利率。
一家位于纽约的经济研究机构ISI Group认为，不是市场不相信世界已经改变的说法，就是它认为通货膨胀率即将飙升。这导致消费者和企业界贷款的成本上升，特别是长期的按揭利率。
前Fed理事会成员Laurence Meyer表示，鉴于债券市场最近的混乱，Fed的官员必然十分担心他们发布的信息会被市场所误解，所以他们将在周二发布简单而直接的信息。
然而，Fed体现其均衡考虑经济增长和通货膨胀风险的方式可能发生改变，人们以往常常能从Fed选择的体现方式中判断美国的利率走势。政府官员称，这份风险声明正在准备之中，且已经在过去3次会议上对其进行了讨论。
Meyer称，Fed主席格林斯潘(Alan Greenspan)上月向国会承诺，在经济增长恢复至满意的水平以前不会加息。Fed可能将此内容包括在其声明中。
和6月份时不一样，目前的迹象有力证明今年下半年经济将出现复苏。这包括商业投资的增加，以及裁员规模的下降。
德意志银行(Deutsche Bank)的首席美国经济学家Peter Hooper表示，人们的消费热情不减，而企业界也最终确信，经济扩张之势已成，并开始增加它们的支出。Hooper说，美国的经济复苏仍处在初期阶段，但已步入正轨。
