Seize the moment . This sentence my parents always told me, and this is the Fed meets next week to consider reducing the scale of asset acquisition, the need to keep in mind the word.

Could it be that it does not sound like purchase bonds begin to reduce code size sufficient reason? Indeed not. Please bear with me.

Take a look at the following this statement, the Fed eager to exit non-conventional monetary policy back to the basics. Of course, back to the basics involved raised the benchmark overnight interest rate, it is more difficult, to say the Fed has no intention of raising interest rates within a short time. Many different studies and official comments do not seem to mince words, covering the acquisition of $ 85 billion per month in U.S. Treasuries and mortgage-backed securities in the third wave of quantitative easing (QE) policy, if compared with the two previous QE, the gradually diminishing returns generated.

The Fed tends to reduce QE, Bernanke June mapped out a timetable for reduction code (later this year), plus we expect the unemployment rate dropped to 7% when the end of the acquisition of assets. Given these factors, beginning next week seems to be the best time to reduce code QE point.

Need so urgent? United States since the end of June 2009 since the recession, economic growth is only a mere 2.1%. Though the unemployment rate fell, but this is mainly because many Americans out of the labor market. So, why now we must reduce the QE it?

We take a look at the views of the Fed QE impact.

　 　 Missed

" Usually refers to quantitative easing by changing the amount of bank reserves, the policy of trying to produce results, and this channel, at least the United States appears to be relatively weak." Bernanke in November 2010 to participate in the financial industry conference in Frankfurt, said in a speech . " In contrast, by affecting the yield of the acquired securities and investment portfolio by investing in human displacement effect of a wide range of yield on assets, the acquisition of securities of this trick worked."

If you can no longer be said that the acquisition of securities and other assets yield a positive effect, then continue the current pace of buying the securities will not make sense. Less delay will not reduce long-term interest rates QE code, because we all know this escape, but is coming soon.

In addition, look econometric model to calculate the expected effect. Monthly purchase amount of $ 85 billion debt with the initial purchase of debt may reduce code size to $ 70 billion, both of which are expected effect of the differences is very small, and will cover up the past by other market forces.

Now the scale of debt reduction code share is not too convincing second reason is that the next few months may not have a better opportunity to reduce code. August employment report was disappointing, has triggered when calling for less code QE more cautious. Payrolls increased 169,000 people, down from an average of 12 months. Even more worrying is the second consecutive month, a few months before the next repair job growth data.

August labor force participation rate fell to 35-year low of 63.2% unemployment rate fell to 7.3% in the grounds

Because the labor force participation rate fell sake. Over the past five years, almost every month the number of unemployed leave the labor market more than the number of people to find new workers.

In the fourth quarter of 2012 to the first quarter of 2013, employment grew by more than real GDP growth suggests should be. Today, between GDP and employment figures seems to be more in tune. Accelerated growth in the economy before the population of 169,000 new jobs each person may be the best situation.

This fall is troubled, which is now considered less code QE third reason. The Fed will have a meeting on October 29-30, it may increase the debt ceiling negotiations and the announcement of the Fed chairmanship next time collision.

　 　 Reduced supply of bonds

Credit Suisse economist Neal Soss and Dana Saporta on September 6 in the U.S. economy summary wrote: " Autumn is not a good time to point that the Fed should not test the market turmoil could trigger a reduction code operation."

In addition to the grounds troubled, Soss and Saporta also believe that the face of mortgage-backed securities and U.S. government bonds and reduce and avoid market expectations are falling apart " the best and most painless less code QE reason." Is that fourth reason .

Coupled with the U.S. use of chemical weapons against Syria indefinite extension reaction, which is the Fed next week, you can begin to reduce the size of code share the fifth most debt is not bad reason. However, this does not mean less code QE is a very easy decision. Even if the current unemployment rate is very close to the Federal Reserve is expected in 2014 will reach the level, but still lack the economic aspects of corroboration - the labor market outlook has not improved significantly.

Soss and Saporta expected, the Fed will likely cut yards QE " packaged" is not a tightening of monetary policy in the message - someone did not understand me? - Might even be proposed to allow the acquisition of the assets of maturity, rather than plan to sell at the right time.

Currently, I have to believe that less code QE issue, the market price has been fully reflected. Is not that what you want prospective guidelines?

soucre from sina

Sina Finance YORK September 13 news, " Japanese Economic News" Friday quoted insiders revealed that U.S. President Barack Obama or the appointment of former U.S. Treasury Secretary Lawrence Summers (Lawrence Summers) as Fed chairman.

Appointment is expected to declare as early as Wednesday after the Federal Reserve monetary policy meeting released. Nikkei said U.S. Deputy Treasury Secretary, former Clinton administration economic adviser Brainerd (Lael Brainard) is likely to be appointed as Fed Vice Chairman.

Current Fed Chairman Ben Bernanke will retire in January next year.

Summers with the current Fed Vice Chairman Janet Yellen (Janet Yellen) is considered to be the next chairman of the Federal Reserve's primary candidates.