Fed contraction means that the balance sheet is only shrinking the balance sheet. Every country, every enterprise and every family has its own balance sheet. For example, if you have 200,000 deposits and no other assets, then your total assets are 200,000. If you buy a house with 6,543,800 yuan, with a down payment of 200,000 yuan and a loan of 800,000 yuan, regardless of the interest cost, your total assets will increase to 6,543,800 yuan. In other words, total assets (654.38+00,000) = liabilities (800,000)+owners' equity (200,000). Expanding the Federal Reserve (buying bonds) is a necessary measure during the financial crisis. Now that the American economy has improved, it should quit. The Federal Reserve's quantitative easing policy has been leading the US stock market higher for many years. At present, the US stock market has reached an all-time high, but the current debt ratio in the United States is as high as 300%. At this time, the Fed's shrinking table is conducive to controlling the rhythm of US stocks.

1. Recently, the US dollar index has continued to weaken, approaching the 90-point mark. The contraction of Fed watches can reduce the amount of dollars in the market and make dollars more expensive. Over the years, the assets of the Federal Reserve have been expanding, and the assets of the Federal Reserve have increased to $4.5 trillion. Taking the initiative to reduce the scale of assets now is conducive to leaving more coping tools for the next possible financial crisis. Raising interest rates and shrinking balance sheets are considered as sharp tools of monetary policy. Since 20 15, the Federal Reserve has raised interest rates four times, but it has not shrunk. Now, shrinking the table is a supplement to tightening monetary policy. In addition, the reduction of the Fed will have an impact on the prices of China bond market, RMB, A shares, real estate market, gold and other assets. The Federal Reserve refers to the US Federal Reserve system and is responsible for performing the duties of the US central bank. The Fed's "reduction statement" refers to reducing the number of related currencies in the market by announcing the reduction of its balance sheet.

Generally speaking, when the inflation rate of a country rises, the central bank will implement the policy of shrinking the table. Generally speaking, shrinking the table is to reduce the currency circulation and let the currency appreciate. Under normal circumstances, the Fed will raise interest rates, reduce capital flows and curb inflation. In terms of exchange rate, the dollar will be supported and appreciated. The contraction and expansion of the Federal Reserve mainly depend on the subsequent development of the American economy. . First of all, we should know what the function of table reduction is. Different from the three traditional businesses of the Federal Reserve and its strategic rival banks in the policy supervision market-collecting the deposit reserve ratio, open market transactions and determining the benchmark interest rate-their purpose is not to dispose of liquidity, but to dispose of assets. The former is a short-term problem, and the latter is a medium-and long-term problem. Therefore, table reduction is a medium-and long-term structural adjustment tool. Looking back on the history of the past few years, you will find that after three quantitative easing policies, the Federal Reserve has injected more than10.5 trillion high-energy liquid monetary assets into the economy. Therefore, the Federal Reserve recovered the high-quality assets of strategic commercial banks.