Domestic policy space opened?
The Fed's "start" of a sharp interest rate cut may narrow the interest rate gap between China and the United States. Many institutions believe that my country's monetary policy tone has obtained a rare adjustment time window and has room to promote a new round of reserve requirement ratio cuts and interest rate cuts.
Lian Ping, chairman of the China Chief Economist Forum, predicts that this round of Fed interest rate cuts may last for 14-16 months. Against this background, Lian Ping believes that my country's monetary policy tone has obtained a rare adjustment time window and has room to promote a new round of reserve requirement ratio cuts and interest rate cuts.
Lian Ping said that from the domestic environment, macroeconomic and financial indicators are relatively weak, and monetary policy is urgently needed to further support. Making reasonable adjustments to the monetary policy tone as soon as possible will help boost market confidence and change the current situation of generally weak market expectations. From the perspective of policy coordination, in order to enhance the counter-cyclical adjustment effect, it is very necessary to make corresponding adjustments to the monetary policy tone at this time, from "stable" to substantial "moderate easing".
On September 19, Liu Gang, a researcher at CICC Research Department, said that if the domestic easing is stronger than that of the Fed, it will bring a greater boost to the market; if the magnitude is limited, which is also a more likely situation under the current reality constraints, then the impact of the Fed's interest rate cut on the Chinese market may be marginal and partial.
For the expectation of policy easing in September, the market expects that the call for a reserve requirement ratio cut is increasingly concentrated. Institutions including Zheshang Securities, Guojin Securities, and Caixin Securities have all issued views that the People's Bank of China may cut the reserve requirement ratio in the near future.
Qin Tai, an analyst at Huajin Securities, believes that it is imperative for monetary policy to shift to a supportive neutral stance. Supply based on demand and sufficient volume and stable prices are currently more reasonable monetary policy expectations, and the forecast of a 50bp reserve requirement ratio cut in September is maintained.
