The Fed is raising rates. Will it affect the ruble and oil? The US Federal Reserve raised its base rate

The Open Market Committee of the US Federal Reserve System, following a two-day meeting, decided to raise the federal funds rate by 0.25 percentage points - to the level of 1.25-1.5% per annum, follows from a message on the website of the American regulator.

This is the fifth increase since December 2015, when the regulator raised the rate from a nine-year historical low of 0-0.25% (the fourth was made in June). Each time the rate grew by 0.25 p.p.

This decision by the Fed market participants.

The Fed sets the rate based on macroeconomic indicators. Its increase indicates that the regulator is satisfied with the situation in the economy, including not entirely optimistic - and unexpected for the market - inflation indicators.

At the end of November, the head of the US Federal Reserve, Janet Yellen, announced that the growth of the American economy strengthened and amounted to 3% in annual terms in the II and III quarters.

“In the meantime, economic growth appears to have picked up from a sluggish pace earlier in the year. After growing at a mere 1.25% annualized rate in the first quarter, U.S. inflation-adjusted GDP is currently estimated to have grown at a rate of 3% in both the second and third quarters, despite disruptions to economic activity in the third quarter due to for the recent hurricanes,” Yellen said. "Moreover," she stressed, "growth is based on an increasingly broad base in various sectors, as well as a large part of the global economy." “I expect that with a gradual adjustment of the monetary policy position, the economy will continue to expand, and the labor market will strengthen to some extent, supporting faster growth in wages and incomes,” the head of the Fed said.

The head of the Fed announced the strengthening of US economic growth

The growth of the American economy strengthened and amounted to 3% in the II and III quarters in annual terms. This was stated by the head of the US Federal Reserve System (FRS) Janet Yellen, speaking on Wednesday at a hearing in the joint committee on the economy of the Senate and the House of Representatives of the US Congress.

She also recalled that in the period from January to October, the US economy created approximately 170,000 new jobs every month. The unemployment rate in October was 4.1%, almost 6% below the peak in 2010, Yellen said.

Earlier, Goldman Sachs said it believes in the steady growth of the US economy and expects four rate hikes next year. Ian Hatzius, chief economist at Goldman Sachs, and his team lowered their unemployment forecast for the end of next year to 3.7%, and by the end of 2019 to 3.5%. By the way, this is the minimum value since the late 1960s.

The US Federal Reserve raised its base interest rate by 25 basis pointskey pointov, up to 0.5-0.75percent per annum. "In light of realized and expected conditions in the labor market and in the field of inflation, the Committee decided to raise the benchmark for the federal discount rate. The approach to monetary policy remains soft and supports further improvement in labor market conditions and a return to two percent inflation," the US regulator said. .

Lessons from crises: do countries learn from mistakes

In December last year, the financial regulator raised the rate by 25 basis points - from 0-0.25 percent to 0.25-0.5 percent. Previously, the base discount rate was raised only in June 2006, and from December 2008 to December 2015 it remained practically at zero - 0-0.25 percent, which was accompanied by the largest issue in US history. Now the Fed is predicting three more rate hikes next year, up from two. The Fed also raised its forecasts for GDP and unemployment by one tenth of a percent, and for inflation by two tenths in 2016.

Almost none of the analysts doubted that the US Federal Reserve would raise the rate, which would lead to an influx of foreign currency into the country, buying up securities and strengthening the dollar. About how this decision will affect the economy, the site told political scientist and publicist Leonid Krutakov.

— How will Donald Trump fulfill his promises under the new conditions? After all, since a strong dollar is a decline e American exports, which is beneficial, first of all, to China, and SW debt reduction.

— Not an increase in debt, but an increase in debt service. Their debt is formed due to the deficit of both trade and budget. He's already huge. Therefore, the debt will grow, that's for sure. And Trump will increase it, they have nowhere to go. In fact, there is now a struggle in the US for a magic machine that turns US debt into investment for the world.

The most important trick that the Americans managed to do, starting with the conclusion of the Bretton Woods agreements, is that the country - the main debtor of the world - is its main creditor. That is, they turned their debts into loans for other countries. And so this is where the fight is. Will they be able to maintain this debt model or will they fail? If it fails, then there will be an internal explosion of this bubble. They raised the rate by 0.25 last time, but the market practically did not react to this. Because the debt is huge at the expense of interest.

Fed rate - . Therefore, it turns out that they pay extra to those who took money from the United States. Pays not the one who borrowed, but the one who borrowed. In general, this is an amazing situation, and the United States must solve this problem first of all, because they are eating away the income of the future, pension funds, and social funds that they have. Because if it’s a minus, then they spend what they have accumulated. That is, a negative rate kills the future. And America is now squeezed. On the one hand, there is a huge external debt that needs to be serviced; on the other, there is a low Fed rate.

In fact, it's like if you bring money to the bank, but pay this bank for holding this money. And in Europe the same thing, there is also a negative deposit of the Central Bank and the zero rate of the ECB with inflation.

It turns out that this is some kind of new economy that still needs to be seriously considered, figured out how it works and where it leads. She's blowing bubbles, no doubt about it. Therefore, America is now between two millstones. And even the raised rate is still below inflation. And America will continue to eat itself.

Trump intended to change the leadership of the Fed. What can Trump do with this system? How does the Fed influence global finance, the central banks of other countries?

- There was one president in US history who tried to take away the investment function from the Federal Reserve and subordinate it to the US Treasury, so that the US Treasury would directly deal with it. It was Kennedy. The FRS is not subordinate to the US Administration, it is a commercial structure formed by 13 private banks, where, in particular, German capital is very seriously represented, because it is one of the participants in the agreement on the creation of the FRS. There was a German banker who later became Hitler's chief banker. The Fed has a very complex system. But something else is more important here - under this system created by the United States, they actually forced all Central Banks to withdraw from their state status - both European and Russian.

That is, our Central Bank has a semi-formal character - semi-private, semi-state. It seems like it is located on the territory of Russia and, as it were, is subordinate to Russia, but at the same time it is not formally subordinate to it, but is actually a division of the Fed and prints derivatives for the dollar.

It is not an independent unit, because it is backed not by domestic industrial resources, but by external dollar reserves. There was a substitution of national currencies, and thanks to this, the system became possible for the United States when they turned their debt into investments.

That is, the United States prints money on credit and gives it to everyone - Russia, China, etc. Accordingly, these countries use them as investments. Such a magical "pot boil - pot do not boil." In America, this problem is the most important now, because they are stuck in terms of expansion.

This system can only work when the dollar zone absorbs new capital assets, new economies. While Eastern Europe and Russia were being privatized, Iraq and Libya were being seized, while the dollar zone was being provided with new real industrial and raw material assets, this system worked.

But as soon as they politically ran into Russia, Syria, as soon as China told them: we will not give up the state status of the People's Bank of China (they protect their internal financial system from the external market), this became a huge obstacle.

This year, for which China was obliged to make the People's Bank a non-state, the same as we have in Russia, a division of the FRS. But at the recent APEC summit in Libya, China frankly told Barack Obama that it would not do that. Now the US faces another dilemma. Or declare China a non-market economy and exclude it from the WTO - but then so many contracts collapse that the United States does not know what to do. Either they don’t give any reaction, but the States cannot behave like that either, and they don’t know how to react.

Now the United States has so many problems that it is scary to imagine how they will get out of this. This is a protracted, severe crisis. Trump is the harbinger of this crisis, or rather, the first thunder of the crisis. Will he be able to do something, reconstruct this system, or will it roll along the knurled, as Clinton wanted, further world expansion? At the very least, Trump announced that there would be no expansion, but the creation of his own project in the territory under his control - in Canada, Mexico, Europe ...

For them, the situation is twofold. This is Triffin's paradox, he formulated it back in the 1960s. On the one hand, the dollar is a global currency - reserve and settlement, and on the other hand, it has a national character, is used internally and is subject to national interests. At least that's how it's declared.

Therefore, when you accept the dollar as a measure of your domestic policy, you must understand that the national interests of the United States are embedded in the dollar. Because money is not a fetish, not golden bars that can be exchanged for anything. Money is government debt.

Is it still dangerous to fight the Fed today? And how can the USAgutprevent the dollar bubble from collapsing?

“The financial overhang is 10 times the total world product. At the same time, not the entire total world product is subject to the dollar and is located in the dollar zone. A lot happens through swaps, China works through barter with Africa and the Middle East in many transactions. When they counted the turnover of China with Africa, it turned out that in terms of metals they make the second turnover of the London Metal Exchange. This is actually a hidden turnover.

Of course, one must understand that with this dollar overhang, they must either swallow the whole world, or come up with some new non-traditional assets. This was stated in the service agreement. For example, about the need to privatize the housing and utilities sector, the state defense order, housing and communal services, education, and medicine.

These are the assets that England, for example, is proud of: education and medicine are those assets that are not yet traded. They either need to be drawn into circulation in order to support the dollar, because money requires more assets than assets require money. Assets need money to develop. And money, shoed and empty, needs assets to be filled, otherwise they will explode.

Therefore, there are two ways: the capture of the outside world - China, Russia, the continuation of expansion, the capture of energy resources and transfer to your own balance. Because now Westerners are not allowed to have more than 20 percent of shares inside our companies.

This was one of the terms of the agreement after Yukos - up to 20 percent, please, buy, trade on your stock exchange. For example, BP bought 18 percent of Rosneft. Now BP can trade all of Rosneft's reserves on the stock exchange as if it were its own, put it on its balance sheet. And this is a huge increase in capitalization. The formal principles approved by the United States that we can put on the balance sheet does not mean that they can actually dispose of these resources. We saw this in the Middle East, we see it in Russia, which is now reorienting itself to China and India in terms of gas and oil supplies.

Therefore, the US has two options. Either expansion, but it was Clinton, or they limit their project to the western hemisphere, create the so-called Big West, Then they will have to carry out a new wave of privatization, both in South America and in Europe, where it will be possible to privatize the housing and communal system, education, all social functions up to the defense order, to prescribe that the state is prohibited from taking protectionist measures in the field of state orders.

That is, let us assume that we have acceded to these agreements. Then General Motors wins a contract for the supply of cars to the Ministry of Defense, and we cannot do anything. These will be the new rules that are dictated there. This is not the case, so the US is teetering on the brink at the rate, following a thread.

The devaluation factor in the development of the dollar, which they used for a long time, has also been exhausted. They overstrained themselves in trying to break Russia when they pushed the price of commodities to the breaking point. They have blown up the corporate, speculative stock market so much that they don't know what to do with that money.

Giving money to Russia or China is like funding a competing political project. It's not even about the economy, but about the fact that "if we give money to Putin, he will drill wells, and with this money from the sold oil he will set up rockets and all sorts of aircraft, and then in Syria he will give us a kick in the ass." Here is the problem for them.

And the money is accumulated, lying in bags, but they cannot push it to the market in developing countries, in Asia, in Russia, because it is politically forbidden for them. No one will pump up their competitor, but inside the reserves, where to develop, what to invest this money in, they don’t have. They do not have their own industry, only services - a service economy, where show business and supermarkets flourish, but there is no industry.

Or they must absorb some new assets, make them marketable. Hence such exotic topics - they passed a law that American companies own the right to develop natural resources on asteroids, on other planets. That is, it seems to be nonsense from the field of idiocy and Chamber No. 6. And on the other hand, this allows them to somehow verbally stimulate the financial market, which does not know where the money is. We swelled up with this huge bubble, but what to do with it? ... Here is the problem - both debt and a financial bubble at the same time.

They created such a huge problem for themselves. They expected that they would fail, break through the defenses of Russia and China and break into these markets. Back in 2008, the Americans wanted to open the markets of Brazil, India, and China, but they said that we would not open our domestic market for you.

When this political round failed, after that their financial crisis hit us, and the whole story began with pumping up the economy, quantitative easing both in the US and in Europe. Because they needed to pay for the losses that their banks suffered from being unable to work with China, Brazil, India and Russia on the terms of these countries, and not on the terms of the United States.

Interviewed by Galina Tychinskaya

Preparedfor publicationYuri Kondratiev

MOSCOW, December 14 - RIA Novosti. The US Federal Reserve raised the interest rate to 1.25-1.5% from 1-1.25% per annum. World oil prices after this news continued to decline.

Three more raises

Most members of the Fed's Open Market Committee predict three hikes in the base rate in 2018, to an average of 2.25%.

According to the dot plot (forecast of rate dynamics), six representatives of the regulator expect that the rate will be increased to an average level of 2.25% in 2018.

Three of them expect the rate to rise by another 0.25 percentage points, the rest believe that the rate should be raised only to the level of 2%.

As for 2019, the four members of the regulator's board do not rule out that the rate will increase five times or more. In the long term, the Fed is now targeting a rate of 3.1%, up from the previous 3%.

The market is ready

Independent economic expert Anton Shabanov believes that the market reaction to the Fed's decision will be minimal.

“Very good and strong reporting was constantly coming out on the American market, and the market assumed in advance that this rate increase would be exactly 25 basis points, which happened,” he said.

According to him, the increase in this rate is also expected to continue over the next year.

Forecast for GDP growth

In addition, the Fed raised its forecast for US economic growth in 2017 to 2.5% from 2.4% expected in September, in 2018 to 2.5% from 2.1%.

In the long term, the Fed expects the US economy to grow by an average of 2%, unemployment at 4.7% and inflation at around 2%.

About bitcoin

The head of the US Federal Reserve, Janet Yellen, also expressed her opinion about bitcoin. According to her, this is an unreliable highly speculative asset that can be used for money laundering.

“The Fed does not want to play any regulatory role with regard to Bitcoin,” she said.

About successor

She also stated that she was confident in the ability of her successor, Jerome Powell, to manage the organization.

Current Fed Chair Janet Yellen's term expires on February 3, 2018. On December 5, the Banking Committee of the Senate of the US Congress by a majority vote approved the candidacy of a member of the Board of Governors of the Fed Powell.

"He is one of those who have been on the Fed's board of governors for several years. He was part of the decisions that we made. Mr. Powell is very well prepared. He has a great understanding of what is happening," Yellen said.

She also stressed that she believes that Powell will maintain the apolitical nature of the decisions taken by the Fed.

The rate hike by the US Federal Reserve was expected: this is the second tightening of monetary policy in three months. As stated earlier, the Fed will gradually phase out its policy of stimulating the economy through a policy of "zero" rates. But, the weakening of the dollar on forex does not fit with the theory - what went wrong?

The "wrong" response to the Fed's rate change

A change in the Fed rate affects the value of money in the US economy. Since the US economy is "tied" to the whole world, this indicator also affects Russia - for example, through the cost of oil. Some economists believe that if the exchange rate of the national currency is affected by a change in the base rate of another country, this means that Russia's financial and monetary policy is dependent on external institutions.

When the US Fed raises the rate, the market Forex reacts unequivocally: borrowing becomes more expensive, and investing in bonds is more profitable. As a result, the dollar exchange rate is growing, and the ruble is weakening: it becomes easier for the Ministry of Finance to fulfill the budget, but the average consumer loses - due to the fact that most goods are imported from abroad, their cost increases.

The current increase in the Fed's rate does not fit into the economic logic: against the background of the growth of the rate, the dollar is only weakening, causing the strengthening of the Russian currency and an increase in the cost of oil.

Why did the Forex market react with a weak dollar to the Fed's rate hike?

It is difficult to give exact reasons. It is possible that the Fed rate increase was too predictable and the consequences of the increase were taken into account in advance in the main quotes. Few people were interested in the issue of the rate: in a few weeks, most economists understood that the Fed rate would be increased. I was interested in another question - a hint of how many times the rate will change. Nothing special has happened: as promised, there will be three rate hikes in 2017, which means that monetary policy will remain predictable.

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The outlook for the dollar is influenced by Donald Trump's willingness to depreciate the national currency in order to support producers and the reduction in US volumes of purchased oil. Considering that the new US budget concept has increased spending on defense and internal security, and no major infrastructure projects (except for the construction of a wall on the border with Mexico) are indicated, this is fraught with rising inflation. The international market will react to this with a decrease in interest in the dollar.

There is a serious capital flight in the US government bond market: it is believed that this is primarily due to the slowdown in the Chinese economy, which needs to "close" the budget. But many tend to see other reasons for this: in the uncertainty of relations between the United States and China. However, not only China is getting rid of US securities: Russia, Saudi Arabia and even Japan have also joined the process of selling US government bonds.

The issue of raising the rate this December has already been actually resolved - investor confidence in this decision by the Fed on Monday, according to CME Group, reached 100% . However, the size of the rate hike has never caused so much controversy among both Russian and Western economists. Let me remind you that Jerome Powell, focused on developing the economy, and not on ensuring financial stability (like Jeanette Yellen), is becoming the new head of the Fed, so a sharp change in the paradigm of the Fed's priorities is possible on the eve of his assumption of office. Rate changes may begin as early as December. The consensus forecast of Western brokerage houses is about 25 percentage points from the current rate of 1.25%, while Russian analysts tend to assume more decisive action - up to an increase of 0.5%, explaining this by the fact that the rate lagging behind the index inflation expectations, which currently stands at 2.8%, could lead to an uncontrolled rise in prices.

Given that the Fed's long-term key rate target is 2.75%, Russian analysts are certainly closer to the truth. However, now a sharp increase in the key rate may return increased volatility to the US stock market, which is experiencing historical highs, which, in turn, may result in negative consequences for the medium-term growth of the country's economy. For example, HSBC experts are inclined to assume that such steps can provoke a change in the conservative approach on the part of investors to a more risky one, as it was in the 2000s, which means that the economy can reach the target indicators much faster than the Fed suggests, but the price of this growth may be the subsequent decline. In addition, based on the rhetoric of the Trump administration, the rollback of quantitative easing, which resulted in the United States having the highest external public debt in history and the lowest lending rates in history, is not desirable in light of the tradedeals initiative proposed by the American president (concluding new trade agreements). with international partners, some kind of insurance against a decrease in the growth of the country's economy). A weak dollar is important for the implementation of new trade agreements.

Currently, in anticipation of the Fed's decision, the dollar is growing against all world currencies (to ruble And Euro it strengthens relatively moderately), oil contracts are under pressure and getting cheaper, as cheaper and gold. At first glance, all signs point to an imminent significant decline in the ruble against the dollar - at least, Russian investors and funds investing in Russian assets have already begun to prepare for this. U.S. bond yields decline (to less than 2.8%), tech and energy stocks soar S&P 500 to a record 2659.99. Let me remind you that this year this index has updated its historical maximum for the 59th time.

However, the decline in oil prices is extremely episodic: on December 6, having fallen by 2.6% and 2.3% on the Chicago and New York exchanges, respectively (following the January oil futures, which were traded in the region of $62 per barrel), already on Friday, oil returned to growth again, on the one hand, due to the increased attention of international investors to energy assets (including Russian ones), on the other hand, thanks to the report Baker Hughes, showing a measurable decline in crude oil inventories in US oil storage facilities. The chances that after the announcement Fed decisions, oil will drop significantly, a little - at the moment it is in no one's interests. Gold continues its bearish trend, having already fallen to $1,240, but there are no sharp changes in its market value yet - the owners of gold contracts, apparently, do not expect a significant increase in the rate and are in no hurry to close their positions.

All this indicates that most likely the current fever, which we are seeing in the US market and in Europe, is more like a storm in a glass than preparation for a change in the Fed's monetary policy. This means that the ruble retains all chances to remain relatively stable against the dollar. As far as the euro is concerned, much depends on ECB meetings, which is scheduled immediately after the Fed board meeting. Most likely, the European Central Bank will leave everything unchanged.