Passers-by wearing protective face masks after the outbreak of coronavirus disease (COVID-19) will be reflected on the screen displaying stock prices outside the Tokyo securities company in Japan on March 17, 2020.
Issei Kato | Reuters
According to Carlos Casanova, Senior Economist for Asia at Union Bancaire Priv in Switzerland, Asian countries will face three major headwinds over the next year.
“The number of cases of Omicron is increasing. China’s growth rate is slow at about 5%, and now the Fed’s minutes suggest that the pace of tapering is faster than expected,” he told CNBC. rice field. “On Friday, these factors” pose a threat to the entire region, “he added.
Central bank of the United States Creepy investor A few minutes later last week December meeting The member who sent the signal was ready Tighten monetary policy more aggressively Than previously expected.
The Federal Reserve He has begun raising interest rates, dialed back into bond purchase programs, and has shown that he may be ready for high-level discussions on reducing holdings of government bonds and mortgage-backed securities.
Emerging markets in Asia are in a good position, but will be more affected by these factors. Casanova pointed out, especially when the Fed is proactive in policy.
“Real interest rates will be compressed between emerging markets in Asia and the United States,” he said. He added that this could lead to further outflows of bonds in the region, especially from the more vulnerable economies.
In 2013, the Fed called “Tapered tram“When we started ending our asset purchase program, investors panicked, triggered the sale of bonds, and the Treasury yields soared.
As a result, emerging markets in Asia suffered sharp capital outflows and currency depreciation, forcing central banks in the region to raise interest rates to protect their capital accounts.
According to Casanova, the Fed depends on how it normalizes its policies in the coming months.
“What we are trying to avoid is to raise rates three times in 2022 while actively working to shrink our balance sheet,” he said, regional and deflationary pressures.
Omicron, China’s slowdown, tapering, economists say
Source link Omicron, China’s slowdown, tapering, economists say
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