Currently, the global economy is still in a "cold winter". In order to get out of the quagmire of the financial crisis as soon as possible, governments of various countries continued to implement large-scale rescue plans in 2009. So far, among these rescue plans, the one that has shocked the world the most is the Federal Reserve’s decision to acquire US$1.15 trillion in Treasury bonds and mortgage bonds announced on March 18, because this decision shows that in order to respond to the financial crisis, the Federal Reserve has boldly adopted what is commonly known as Quantitative easing monetary policy of “printing money”. As the world's superpower, the world's most important economy, and the birthplace of this once-in-a-century financial crisis, changes in the U.S. economic situation play a vital role in global economic trends. Any decision made by the U.S. government will have an impact on other major economies. The Fed's quantitative easing monetary policy will also have an important impact on the global economic trend. 1. The economic situation deteriorated, and the Federal Reserve had to implement quantitative easing monetary policy. Quantitative easing monetary policy, commonly known as "money printing", was proposed by the Bank of Japan in 2001. It refers to a country's monetary authorities printing large amounts of money and purchasing government bonds or corporate bonds. , injecting excess funds into the market with the aim of lowering market interest rates and stimulating economic growth. This policy is usually adopted by monetary authorities when conventional monetary policy is ineffective in stimulating the economy, that is, an unconventional monetary policy is implemented when a liquidity trap exists. The Federal Reserve unexpectedly announced plans to purchase US$1.15 trillion of Treasury bonds and mortgage bonds, officially launching a quantitative easing monetary policy. Quantitative easing monetary policy is a very radical monetary policy. The Federal Reserve has launched a huge capital injection plan in this way. The main reasons are as follows: First, currently, there is no room for implementation of conventional monetary policies such as interest rates, and the Federal Reserve’s move is a last resort. for it. Since the outbreak of the financial crisis, the Federal Reserve has exhausted its interest rate policies and has lowered the federal benchmark interest rate from 5.25 to 0 to 0.25. Now that interest rate policy has come to an end, the Federal Reserve has to implement quantitative expansion policies to continue to maintain the momentum to promote economic expansion; secondly, since last year, U.S. debt was once popular for its safe-haven function, but the long-term U.S. dollar The risk of depreciation and bond defaults, coupled with stagnant or declining foreign exchange reserve growth among Asian buyers, has made U.S. debt a hot potato. Investors, including China and Japan, have resorted to selling large amounts of long-term bonds in exchange for short-term bonds in an attempt to avoid risks, which has pushed up the interest rates on long-term government bonds. For this reason, the Federal Reserve has to purchase long-term government bonds on its own to lower its interest rates; finally, The Fed's move itself shows that the U.S. economy has reached a very critical situation, and this is an extraordinary policy adopted in an extraordinary state. Judging from the data that has been released, the economic situation in the United States is not optimistic. The unemployment rate in the United States further climbed to 8.1 in February, which reached a new high in the past 25 years. The credit card default rate in February has also risen to a 20-year high. 2. The impact of the Federal Reserve's quantitative easing monetary policy on the global economic situation. The quantitative easing monetary policy is a "double-edged sword." On the one hand, the implementation of quantitative easing monetary policy injects a large amount of funds into the market, maintaining market interest rates at a very low level, prompting Bank lending stimulates investment and consumption, which is helpful for economic recovery; however, on the other hand, it raises the risk of inflation. When economic growth stagnates, it may lead to more serious stagflation, and it will also lead to the country’s The sharp depreciation of the currency not only stimulates the country's exports, but also worsens the economic situation of relevant trading entities, causing trade frictions and so on. For a world economic hegemon like the United States, the impact of implementing such a radical policy on its own and global economies cannot be underestimated. 1. Quantitative easing monetary policy may help the U.S. economy embark on the road to recovery as soon as possible. The original intention of the Federal Reserve's bold implementation of quantitative easing monetary policy is to lower interest rates on mortgages and other consumer loans and stimulate spending to help revitalize the U.S. economy. It is too early to tell whether this huge bond-buying plan can help the United States escape the worst financial crisis in more than 70 years. But at least in theory, quantitative easing monetary policy can help the U.S. economy embark on the road to recovery.

The Fed's bond purchase plan includes the purchase of $300 billion in long-term government bonds, $750 billion in mortgage-backed securities guaranteed by Fannie and Freddie, and up to $100 billion in agency bonds. The Fed's acquisition of U.S. Treasury bonds will push up Treasury bond prices and lower yields, helping to lower long-term interest rates. Correspondingly, since the interest rates of many loans and securities assets are based on U.S. Treasury bonds, it will also drive other types of interest rates down, thereby stimulating investment and consumption. In addition, this financial crisis originated from the U.S. real estate market. Whether the real estate market can recover is the key to whether the U.S. economy can get out of recession. The Fed's purchase of mortgage-backed bonds guaranteed by Fannie and Freddie will directly push down mortgage rates. Affected by the Federal Reserve's huge bond-buying program, mortgage loan yields backed by mortgage loans issued by Fannie and Freddie fell to their lowest level in two months on March 20, indicating that the Federal Reserve's bond-buying program may be in effect in the near future. In a short period of time, the interest rate on new loans will be pushed down to a record low, thereby attracting home buyers to re-enter the market, prompting the real estate market to recover as soon as possible, thereby stabilizing the US economy. 2. Quantitative easing monetary policy has laid the hidden danger of global inflation. After the Federal Reserve announced that it would start printing money and inject huge amounts of capital into the market, the market was most worried that the Fed's move would lead to a weakening of the U.S. dollar and rise in commodity prices, burying the hidden danger of global inflation. Affected by the Federal Reserve's huge capital injection plan, the U.S. dollar index has fallen rapidly from its high level in recent days. At the same time, affected by the depreciation of the U.S. dollar, the prices of crude oil, gold and non-ferrous metals have skyrocketed. Since the world's major commodities are priced based on the US dollar, the depreciation of the US dollar may trigger a new round of resource price increases. Although this will ease the world's deflation situation, it will also sow the seeds of inflation. Moreover, if the quantitative easing monetary policy fails Putting the U.S. economy on the road to recovery, economic downturn may lead to stagflation. In addition, when the Federal Reserve aggressively issues currency, other countries are unwilling to see their currencies appreciate on a large scale against the U.S. dollar, which in turn prompts other countries' central banks to expand currency issuance, so that the price of the entire asset will gradually rise. Recently, the central banks of the United Kingdom, Japan and other countries have successively announced the purchase of large amounts of national government bonds in the secondary market, which means that major economies around the world have begun to pursue quantitative easing monetary policies, and inflation may follow. 3. Quantitative easing monetary policy worsens the economic situation of relevant trading entities. The Fed's quantitative easing monetary policy will cause the U.S. dollar to weaken. In addition to promoting the rise in commodity prices, it will also cause other currencies to appreciate significantly against the U.S. dollar. In fact, on the day the Federal Reserve announced its huge capital injection plan, the world's major currencies appreciated significantly against the US dollar, with the euro appreciating by 3.5, the yen by 2.4, the pound by 1.6, and the Canadian dollar by 1.7. This will weaken the export capacity of relevant trading groups to the United States, especially for those export-oriented emerging economies that are in the whirlpool of the financial crisis. The Fed's move will inflict an even worse blow to them and may trigger trade frictions. 4. The Federal Reserve’s massive bond purchases reduce the value of foreign exchange assets of the corresponding debt-holding countries. Although this financial crisis originated in the United States, due to the strong economic strength of the United States and the unique international status of the U.S. dollar, U.S. debt was once popular for its safe-haven function. U.S. Treasury bonds occupy an important position among the foreign exchange assets of many governments, including China. The Fed's massive purchases of U.S. Treasury bonds will push up U.S. Treasury bond prices and lower their yields. On March 18, the U.S. benchmark 10-year government bond yield plummeted from 3.01 to 2.5, the largest one-day drop since 1981. This This will lead to huge depreciation risks in the foreign exchange assets of the corresponding debt-holding countries. For the United States, the depreciation of the U.S. dollar and the reduction in Treasury bond yields may lead to the outflow of huge amounts of foreign capital from the United States. This is also a cruel reality that the U.S. economy, still in the midst of the financial crisis, has to face. 3. How does the Chinese government respond to the Federal Reserve’s quantitative easing monetary policy? As the largest creditor and major trading partner of the United States, the implementation of the Federal Reserve’s quantitative easing monetary policy will cause China to face multiple pressures. We should correctly understand this and actively respond to it. The first pressure is the preservation of the value of foreign exchange assets.

U.S. dollar assets account for half of China's huge foreign exchange reserves. The depreciation of the U.S. dollar and the decline in U.S. bond yields will directly lead to a sharp depreciation of my country's foreign exchange assets. The most important way to reduce the risk of depreciation is to diversify the investment direction of foreign exchange reserve assets, thereby reducing the proportion of U.S. dollar assets. Judging from the current global economic situation, it is very necessary to increase investment in resource products such as gold and energy and related enterprises when asset prices are at relatively historical lows and there is a greater risk of inflation in the future. Secondly, there is the issue of RMB exchange rate. The United States is my country's second largest exporting country. The Fed's quantitative easing monetary policy will increase the pressure on the appreciation of the RMB, which will undoubtedly be a heavy blow to China's foreign trade export companies that are in dire straits due to the financial crisis and RMB appreciation. Therefore, Maintaining the stability of the RMB exchange rate is crucial. In addition, we can increase exports to other trading partners, thereby weakening the impact of the depreciation of the US dollar on our exports, or further increase the export tax rebate rate to buffer the impact of the depreciation of the US dollar on our export industry. Finally, due to factors such as the large amount of domestic credit and resource price reforms, there is already a potential risk of inflation. If international primary product prices rise, this trend will be boosted. This situation requires the government to pay close attention to market changes, flexibly adjust relevant policies in a timely manner, and control inflation within a moderate range. Quantitative easing monetary policy is a "double-edged sword" with many side effects. It is a very radical monetary policy, and the Federal Reserve has no choice but to do it. As the United States is the world's most important economy, the Federal Reserve's quantitative monetary policy will have an important impact on the global economic situation. We should correctly understand the tremendous pressure that the Federal Reserve's move has put on our country, and actively respond to it to minimize its side effects on our country's economic development.