Discuss the discount rate. What will happen at the closed meeting of the Federal Reserve today?

Without the knowledge of the market, the Fed website issued an announcement on April 7. According to the accelerated procedure, the meeting of the Board of Directors of the Fed will be held in Washington on Monday (April 1 1: 30) local time to discuss and decide the discount rate of the Fed.

For this seemingly innocuous news, the reporter of China Business News also found that a former person from the Global Quantitative Research Department of Citi Investment Research Department commented like this-the last emergency meeting of the Federal Reserve was at 20 15, 1 1, and the first rate hike was at1(20/kloc. How to weigh raising interest rates and shrinking the table?

In fact, on April 8, Beijing time, four Federal Reserve Chairmen, including current Chairman Yellen, gathered together and expressed their high affirmation of the US economic recovery. The Federal Reserve will hold an interest rate meeting on April 26-27, local time, and then announce the interest rate resolution in April. At present, most economists expect the Fed to raise interest rates in June.

Emergency closed-door meeting or "rehearsal" for raising interest rates

According to the website of the Federal Reserve, the results of the meeting will be announced after the closed meeting on April 1 1.

According to CMEGroup's FedWatch tool (interest rate indicator), the current trader's expectation of raising interest rates in April is 3.5%, compared with 20.9% in June. Although the figure of 3.5% seems to have a low probability of raising interest rates, it was only zero before 1 month, and the option of reducing interest rates by 25 basis points to 0~0.25% still existed at that time.

Hong Hao, chief strategist of Bank of Communications International, told the reporter of China Business News that this also seems to show that China and the global market are overly relaxed about the prospect of the Fed raising interest rates.

It was at 20 10/51.30 Beijing time on October 23rd that the Federal Reserve held a similar closed-door meeting to discuss the reserve ratio and rediscount rate of commercial banks. At that time, the Federal Reserve announced that it would raise the refinancing rate, which basically implied that the interest rate meeting in June 5438+February last year would raise the federal funds rate. As expected, the Federal Reserve announced a 25 basis point rate hike at 3 am Beijing time (20 15 12 17), which was the first rate hike in the past decade.

In fact, according to the minutes of the meeting on the discount rate of 5,438+10 in June last year, the number of regional Fed presidents who supported the increase of the discount rate from the current 0.75% to 1% increased to nine, eight in September and five in July and August.

At present, there are also views that if Monday's emergency meeting really implies that the Fed is "rehearsing" for raising interest rates in April, then why didn't the Fed mention it in the minutes of the previously announced meeting on interest rates in March? The latest minutes show that Fed officials decided to keep the discount rate and reserve ratio unchanged at that time.

The discount rate is the interest rate at which the Federal Reserve provides loans to commercial banks. It is usually the last channel of bank funds and belongs to the upper track of the Fed's interest rate instruments. Except for occasional and short-term emergency needs, the Fed generally discourages banks from borrowing money. The difference between the discount rate and the overnight federal funds rate is also a major economic control tool of the Federal Reserve.