Federal Reserve kept interest rates unchanged at 0-0.25%, and reiterated in a long time to maintain abnormally low interest rates unchanged. The Fed also announced a total of 6,000 billion dollars in the second round of the quantitative easing program (QE2); said it would regularly review the scale and pace when needed to adjust according to the progress of recovery.
The Fed's policy decisions most directly affect the U.S. dollar, the dollar index on Thursday (Nov. 4) sharply lower, hit late in the European market for nearly a year low of 75.63. Gold jumped rapidly, one step away from a record high.
But market participants suspect that the effect of the Fed move did not stop, they not only move that the Fed can not solve the fundamental problem of the U.S. economy, will the global economic imbalance, so that foreign exchange markets increased tension, and ultimately make it loose from the food policy consequences.
The world's largest bond fund at Pacific Investment Management Company (PIMCO) Mohamed El-Erian, chief executive said on Thursday that the second round of the quantitative easing policy of the Federal Reserve will not completely solve the problems facing the U.S. economy and global currency markets will amplify the tension , while the United States in the leading position in the global economy have a negative impact.
El-Erian said that such an outflow of capital will be a threat to other countries. Brazil, China and several other emerging economies already showing signs of overheating, the euro zone and Japan may be forced to suffer the appreciation of the currency drag. Meanwhile, the Fed move will undermine the U.S. economy, "global reserve currency countries and the most depth, the most predictable of the economies" of the image.
Philippa Malmgren, president Principalis Asset Management believes that the significant rise in commodity prices and increasing inflation in emerging markets could have a negative impact on developed economies, as enterprises can reduce the input costs and the inflow of overseas investment funds.
German commercial banks (Commerzbank AG) Thursday and foreign exchange strategist Lutz Karpowitz said Ulrich Leuchtmann, the so-called quantitative easing program may have become a bottomless pit. The planned purchase of government bonds to promote more rapid economic recovery from the far goal.
Federal Reserve policies, the emerging economies, concerns about the move or cause the acceleration of capital inflow and increase upward pressure on the currency to adverse economic, have expressed dissatisfaction with Fed policy, said it would consider taking measures to curb capital inflows. This also makes next week in Seoul at the Group of 20 (G20) summit on global imbalances and exchange rate issues in the hope to reach substantive agreements 趋淡.
Standard Bank (SB) in Hong Kong strategist Patrick Bennett said: "quantitative easing will be excess liquidity caused by the influx of Asian currency markets and exacerbate the region, especially the pressure of RMB appreciation."
The People's Bank of China (PBOC) Monetary Policy Committee said on Thursday Xia Bin: "As long as the world against the U.S. dollar and other major international currency issue do not form certain constraints, there will be such as the lament of many western people of insight: the longer a crisis is still inevitable! China must consider what is beneficial to China. "At the same time, He Fan, an economist at the CASS, said China needs to prevent inflation intensified.
Hong Kong Monetary Authority (HKMA) warned that capital inflows will boost the region's housing bubble.
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