[FED Watch] 수익률 반등과 파월의 잭슨 홀 심포지엄 발표 - 2019.8.26 > Fed Watch

<1> 금주의 T-Bill Yield Curve : 수익률 전반적으로 큰 폭 반등

 

 ■ 국채 수익률 상승 반전

   - 1월물(2bp),6월물(5bp)를 제외하면 모두 큰 폭으로 상승

   - 만기 2년 및 30년 물 수익률은 13bp 이상 상승

   - 경기침체에 관한 연준의 판단이 트럼프 대통령과 크게 다름에 따라 

     향후 FOMC 기준금리 인하 기대감에 큰 의문이 생긴 때문

 

 ■ FOMC의결 위원 중 금리인하를 반대하는 매파가 공공연히 현상유지를 

    지지하는 의견을 밝힘에 따라 

    9월 17-18일 FOMC회의에서 금리인하가 없을지도 모른다는 의문 대두 

 

■ 국채 10년 만기 물 수익률은 FOMC 회의(8월1일) 직후 1.90%로 하락한 뒤

   8월 15일 1.52%까지 지속 하락 

 

  - 8월 22일 장중 한 때 다시 수익률역전이 일어났음 

 

<2> 제롬 파월 연준의장의 잭슨 홀 심포지엄  발표문(2019.8.23.)

 

  “ 미국경제는 소비호조에 따라 지속적으로 좋은 모습을 보이고 있다. 

    신규일자리창출은 최근 작년보다 다소 둔화되는 느낌이나 

    경제활동인구의 증가폭 보다는 더 많다. 

    물가상승률은 2%에 근접하고 있다.   

    이러한 사실들을 분석평가한 결과로 볼 때

    탄탄한 고용시장과 2% 물가 상승을 유지하는 경기확장을 유지하기 위해 

    우리는 필요한 정책조치를 펼 것이다. “

    

    Meanwhile, the U.S. economy has continued to perform well overall, driven by consumer spending. Job creation has slowed from last year's pace but is still above overall labor force growth. Inflation seems to be moving up closer to 2 percent. Based on our assessment of the implications of these developments, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.

    “ Challenges for Monetary Policy ”

 

This year's symposium topic is "Challenges for Monetary Policy," and for the Federal Reserve those challenges flow from our mandate to foster maximum employment and price stability. From this perspective, our economy is now in a favorable place, and I will describe how we are working to sustain these conditions in the face of significant risks we have been monitoring.

 

The current U.S. expansion has entered its 11th year and is now the longest on record. The unemployment rate has fallen steadily throughout the expansion and has been near half-century lows since early 2018. But that rate alone does not fully capture the benefits of this historically strong job market. Labor force participation by people in their prime working years has been rising. While unemployment for minorities generally remains higher than for the workforce as a whole, the rate for African Americans, at 6 percent, is the lowest since the government began tracking it in 1972. For the past few years, wages have been increasing the most for people at the lower end of the wage scale. People who live and work in low- and middle-income communities tell us that this job market is the best anyone can recall. We increasingly hear reports that employers are training workers who lack required skills, adapting jobs to the needs of employees with family responsibilities, and offering second chances to people who need one.

 

Inflation has been surprisingly stable during the expansion: not falling much when the economy was weak and not rising much as the expansion gained strength. Inflation ran close to our symmetric 2 percent objective for most of last year but has been running somewhat below 2 percent this year.

 

Thus, after a decade of progress toward maximum employment and price stability, the economy is close to both goals. Our challenge now is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind, and so that inflation is centered firmly around 2 percent.

 

Today I will explore what history tells us about sustaining long, steady expansions. A good place to start is with the passage of the Employment Act of 1946, which stated that it is the "continuing policy and responsibility of the Federal Government ... to promote maximum employment, production, and purchasing power." Some version of these goals has been in place ever since. I will divide the history since World War II into three eras organized around some well-known "Greats." The first era comprises the postwar years through the Great Inflation. The second era brought the Great Moderation but ended in the Great Recession. The third era is still under way, and time will tell what "Greats" may emerge.

 

Each era presents a key question for the Fed and for society more generally. The first era raises the question whether a central bank can resist the temptations that led to the Great Inflation. The second era raises the question whether long expansions supported by better monetary policy inevitably lead to destabilizing financial excesses like those seen in the Great Moderation. The third era confronts us with the question of how best to promote sustained prosperity in a world of slow global growth, low inflation, and low interest rates. Near the end of my remarks, I will discuss the current context, and the ways these questions are shaping policy.

 

Era I, 1950–1982: Policy Breeds Macroeconomic Instability and the Great Inflation

 

The late 1940s were a period of adjustment to a peacetime economy. As the 1940s turned to the 1950s, the state of knowledge about how best to promote macroeconomic stability was limited. The 1950s and early 1960s saw the economy oscillating sharply between recession and growth above 6 percent (figure 1, panel A). Three expansions and contractions came in quick succession. With the benefit of hindsight, the lack of stability is generally attributed to "stop and go" stabilization policy, as monetary and fiscal authorities grappled with how best to modulate the use of their blunt but powerful tools.3

 

Beginning in the mid-1960s, "stop and go" policy gave way to "too much go and not enough stop"—not enough, that is, to quell rising inflation pressures. Both inflation and inflation expectations ratcheted upward through four expansions until the Fed, under Chairman Paul Volcker, engineered a definitive stop in the early 1980s (figure 1, panel C). Each of the expansions in the Great Inflation period ended with monetary policy tightening in response to rising inflation.

 

Policymakers came out of the Great Inflation era with a clear understanding that it was essential to anchor inflation expectations at some low level. But many believed that central bankers would find it difficult to ignore the temptation of short-term employment gains at the cost of higher inflation down the road.4

 

Era II, 1983 through 2009: the Great Moderation and Great Recession

 

As the second era began, inflation was falling, and it continued to fall for about a decade (figure 2, panel C). In 1993, core inflation, which omits the volatile food and energy components, first fell below 2.5 percent, and has since remained in the narrow range of 0.9 percent to 2.5 percent.5 Greater success on price stability came with greater success on employment. Expansions in this era were longer and more stable than before (figure 2, panel A). The era saw two of the three longest U.S. expansions up to that point in history.6

 

Anchored inflation expectations helped make this win-win outcome possible, by giving the Fed latitude to support employment when necessary without destabilizing inflation. The Fed was cutting, not raising, rates in the months prior to the end of the first two expansions in this era, and the ensuing recessions were mild by historical standards. And twice during the long expansion of the 1990s, the Federal Open Market Committee (FOMC) eased policy in response to threats to growth. In 1995, responding to evidence of slowing in the United States and abroad, the FOMC reduced the federal funds rate over a few months. In 1998, the Russian debt default and the related collapse of the hedge fund Long‑Term Capital Management rocked financial markets that were already fragile from the Asian financial crisis. Given the risks posed to the U.S. economy, the FOMC again lowered the federal funds rate over a period of months until events quieted. The 10-year expansion weathered both events with no discernible inflation cost.7

By the turn of the century, it was beginning to look like financial excesses and global events would pose the main threats to stability in this new era rather than overheating and rising inflation. The collapse of the tech stock bubble in 2000 and the September 11, 2001, terrorist attacks played key roles in precipitating a slowdown that turned into a recession.8 And the next expansion, as we are all painfully aware, ended with the collapse of a housing bubble and the Global Financial Crisis. Thus, this second era provided good reason for optimism about the Fed's ability to deliver stable inflation, but also raised a question about whether long expansions inevitably lead to destabilizing financial excesses.

 

Era III, 2010 and After: Monetary Policy and the Emerging New Normal

 

The third era began in 2010 as the recovery from the Great Recession was taking hold. My focus in discussing this era will be on a "new normal" that is becoming apparent in the wake of the crisis. I will fast-forward past the early years of the expansion and pick up the story in December 2015.9 The unemployment rate had fallen from a peak of 10 percent to 5 percent, roughly equal to the median FOMC participant's estimate of the natural rate of unemployment at the time. At this point, the Committee decided that it was prudent to begin gradually raising the federal funds rate based on the closely monitored premise that the increasingly healthy economy called for more-normal interest rates. The premise was generally borne out: Growth from the end of 2015 to the end of 2018 averaged 2.5 percent, a bit above the 2.2 percent rate over the previous five years (figure 2, panel A). The unemployment rate fell below 4 percent, and inflation moved up and remained close to our 2 percent objective through much of 2018 (figure 2, panels B and C).

 

That brings us to 2019. Before turning to issues occupying center stage at present, I want to address a long-running issue that I discussed here last year: tracking the "stars" that serve as guideposts for monetary policy. These include u*, the natural rate of unemployment, and r*, the neutral real rate of interest. Unlike celestial stars, these stars move unpredictably and cannot be directly observed. We must judge their locations as best we can based on incoming data and then add an element of risk management to be able to use them as guides.

 

Since 2012, declining unemployment has had surprisingly little effect on inflation, prompting a steady decline in estimates of u* (figure 3).11 Standard estimates of r* have declined between 2 and 3 percentage points over the past two decades. Some argue that the effective decline is even larger.12 Incorporating a lower value of u* into policymaking does not require a significant change in our approach. The significant fall in r*, however, may demand more fundamental change. A lower r* combined with low inflation means that interest rates will run, on average, significantly closer to their effective lower bound.

 

The key question raised by this era, then, is how we can best support maximum employment and price stability in a world with a low neutral interest rate.

 

Current Policy and the Three Key Questions

 

Let me turn now to the current implications for monetary policy of the questions raised by these three eras. The first era raised the question of whether the Fed can avoid excessive inflation. Inflation has averaged less than 2 percent over the past 25 years, and low inflation has been the main concern for the past decade. Low inflation seems to be the problem of this era, not high inflation. Nonetheless, in the unlikely event that signs of too-high inflation return, we have proven tools to address such a situation.

 

The second era's question—whether long expansions inevitably breed financial excesses—is a challenging and timely one. Hyman Minsky long argued that, as an expansion continues and memories of the previous downturn fade, financial risk management deteriorates and risks are increasingly underappreciated. This observation has spurred much discussion. At the end of the day, we cannot prevent people from finding ways to take excessive financial risks. But we can work to make sure that they bear the costs of their decisions, and that the financial system as a whole continues to function effectively. Since the crisis, Congress, the Fed, and other regulatory authorities here and around the world have taken substantial steps to achieve these goals. Banks and other key institutions have significantly more capital and more stable funding than before the crisis. We comprehensively review financial stability every quarter and release our assessments twice a year to highlight areas of concern and allow oversight of our efforts. We have not seen unsustainable borrowing, financial booms, or other excesses of the sort that occurred at times during the Great Moderation, and I continue to judge overall financial stability risks to be moderate. But we remain vigilant.

 

That leaves the third question of how, in this low r* world, the Fed can best support the economy. A low neutral interest rate presents both near-term and longer-term challenges. I will begin with the current context. Because today's setting is both challenging and unique in many ways, it may be useful to lay out some general principles for assessing and implementing appropriate policy and to describe how we have been applying those principles.

 

Through the FOMC's setting of the federal funds rate target range and our communications about the likely path forward for policy and the economy, we seek to influence broader financial conditions to promote maximum employment and price stability. In forming judgments about the appropriate stance of policy, the Committee digests a broad range of data and other information to assess the current state of the economy, the most likely outlook for the future, and meaningful risks to that outlook. Because the most important effects of monetary policy are felt with uncertain lags of a year or more, the Committee must attempt to look through what may be passing developments and focus on things that seem likely to affect the outlook over time or that pose a material risk of doing so. Risk management enters our decisionmaking because of both the uncertainty about the effects of recent developments and the uncertainty we face regarding structural aspects of the economy, including the natural rate of unemployment and the neutral rate of interest. It will at times be appropriate for us to tilt policy one way or the other because of prominent risks. Finally, we have a responsibility to explain what we are doing and why we are doing it so the American people and their elected representatives in Congress can provide oversight and hold us accountable.

 

We have much experience in addressing typical macroeconomic developments under this framework. But fitting trade policy uncertainty into this framework is a new challenge. Setting trade policy is the business of Congress and the Administration, not that of the Fed. Our assignment is to use monetary policy to foster our statutory goals. In principle, anything that affects the outlook for employment and inflation could also affect the appropriate stance of monetary policy, and that could include uncertainty about trade policy. There are, however, no recent precedents to guide any policy response to the current situation. Moreover, while monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade. We can, however, try to look through what may be passing events, focus on how trade developments are affecting the outlook, and adjust policy to promote our objectives.

 

This approach is illustrated by the way incoming data have shaped the likely path of policy this year. The outlook for the U.S. economy since the start of the year has continued to be a favorable one. Business investment and manufacturing have weakened, but solid job growth and rising wages have been driving robust consumption and supporting moderate growth overall.

 

As the year has progressed, we have been monitoring three factors that are weighing on this favorable outlook: slowing global growth, trade policy uncertainty, and muted inflation. The global growth outlook has been deteriorating since the middle of last year. Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States. Inflation fell below our objective at the start of the year. It appears to be moving back up closer to our symmetric 2 percent objective, but there are concerns about a more prolonged shortfall.

 

Committee participants have generally reacted to these developments and the risks they pose by shifting down their projections of the appropriate federal funds rate path. Along with July's rate cut, the shifts in the anticipated path of policy have eased financial conditions and help explain why the outlook for inflation and employment remains largely favorable.

 

Turning to the current context, we are carefully watching developments as we assess their implications for the U.S. outlook and the path of monetary policy. The three weeks since our July FOMC meeting have been eventful, beginning with the announcement of new tariffs on imports from China. We have seen further evidence of a global slowdown, notably in Germany and China. Geopolitical events have been much in the news, including the growing possibility of a hard Brexit, rising tensions in Hong Kong, and the dissolution of the Italian government. Financial markets have reacted strongly to this complex, turbulent picture. Equity markets have been volatile. Long-term bond rates around the world have moved down sharply to near post-crisis lows. Meanwhile, the U.S. economy has continued to perform well overall, driven by consumer spending. Job creation has slowed from last year's pace but is still above overall labor force growth. Inflation seems to be moving up closer to 2 percent. Based on our assessment of the implications of these developments, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.

 

The Three Questions in the Longer Run

 

Looking back over the three eras, monetary policy has evolved to address new challenges as they have arisen. The inflation targeting regime that emerged after the Great Inflation has led to vastly improved outcomes for employment and price stability around the world. One result has been much longer expansions, which often brought with them the buildup of financial risk. This new pattern has led us to understand that assuring financial stability over time requires much greater resilience in our financial system, particularly for our largest, most complex banks.

 

As we look back over the decade since the end of the financial crisis, we can again see fundamental economic changes that call for a reassessment of our policy framework. The current era has been characterized by much lower neutral interest rates, disinflationary pressures, and slower growth. We face heightened risks of lengthy, difficult-to-escape periods in which our policy interest rate is pinned near zero. To address this new normal, we are conducting a public review of our monetary policy strategy, tools, and communications—the first of its kind for the Federal Reserve. We are evaluating the pros and cons of strategies that aim to reverse past misses of our inflation objective. We are examining the monetary policy tools we have used both in calm times and in crisis, and we are asking whether we should expand our toolkit. In addition, we are looking at how we might improve the communication of our policy framework.

 

Public engagement, unprecedented in scope for the Fed, is at the heart of this effort. Through Fed Listens events live-streamed on the internet, we are hearing a diverse range of perspectives not only from academic experts, but also from representatives of consumer, labor, business, community, and other groups. We have begun a series of FOMC meetings at which we will discuss these questions. We will continue reporting on our discussions in the FOMC minutes and share our conclusions when we finish the review next year.

 

I will conclude by saying that we are deeply committed to fulfilling our mandate in this challenging era, and I look forward to the valuable insights that will, I am confident, be shared at this symposium.

 

<3> FOMC의사록(2019년 7.30-31) 중 정책결정(Committee Policy Action)부분

     (2019년 8월 21일 공개)

 

■ Committee Policy Action

 

In their discussion of monetary policy for this meeting, members noted that while there had been some improvement in economic conditions over the intermeeting period and the overall outlook remained favorable, significant risks and uncertainties attending the outlook remained. 

In particular, sluggish U.S. business fixed investment spending and manufacturing output had lingered, suggesting that risks and uncertainties associated with weak global economic growth and in international trade were weighing on the domestic economy. Strong labor markets and rising incomes continued to support the outlook for consumer spending, but modest growth in prices and wages suggested that inflation pressures remained muted. Inflation had continued to run below the Committee’s 2 percent symmetric objective. Marketbased measures of inflation compensation moved up modestly from the low levels recorded in June, but a portion of this change likely reflected the expectation by market participants of additional near-term monetary accommodation. Survey-based measures of longer-term inflation expectations were little changed. On this basis,all but two members agreed to lower the target range for the federal funds rate to 2 to 2¼ percent at this meeting.

 

With this adjustment to policy, those members who voted for the policy action sought to better position the overall stance of policy to help counter the effects on the outlook of weak global growth and trade policy uncertainty, insure against any further downside risks from those sources, and promote a faster return of inflation to the Committee’s symmetric 2 percent objective than would otherwise be the case. Those members noted that the action taken at this meeting should be viewed as part of an ongoing reassessment of the appropriate path of the federal funds rate that began in late 2018. 

 

Two members preferred to maintain the current target range for the federal funds rate. In explaining their policy views, those members noted that economic data collected over the intermeeting period had been largely positive and that they anticipated continued strong labor markets and solid growth in activity, with inflation gradually moving up to the Committee’s 2 percent target. One member also noted that a further easing in policy at a time when the economy is very strong and asset prices are elevated could have adverse implications for financial stability. 

 

Members agreed that in determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee would assess realized and expected economic conditions relative to the Committee’s maximum-employment and symmetric 2 percent inflation objectives. They reiterated that this assessment would take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. 

 

Members generally agreed that it was important to maintain optionality in setting the future target range for the federal funds rate and, more generally, that near-term adjustments of the stance of monetary policy would appropriately remain dependent on the implications of incoming information for the economic outlook.

With regard to the postmeeting statement, the Committee implemented several adjustments in the description of the economic situation, including a revision to recognize that market-based measures of inflation compensation “remain low.” 

 

The Committee stated that the reduction in the target range for the federal funds rate supported its view that “sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective” remained the most likely outcomes, but “uncertainties about this outlook remain.” The phrase “as the Committee contemplates the future path” of the target range for the federal funds rate was added to underscore the Committee’s intention to carefully assess incoming information before deciding on future policy adjustments.

 

The statement noted that the Committee would “continue to monitor the implications of incoming information for the economic outlook” and would “act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.” Finally, the Committee announced the conclusion of the reduction of securities holdings in the SOMA.

Ending the runoff of securities holdings two months earlier than initially planned was seen as having only very small effects on the balance sheet, with negligible implications for the economic outlook, and was helpful in simplifying communications regarding the usage of the Committee’s policy tools.

 

At the conclusion of the discussion, the Committee voted to authorize and direct the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the SOMA in accordance with the following domestic policy directive, to be released at  2:00 p.m.:

 

“Effective August 1, 2019, the Federal Open Market Committee directs the Desk to undertake open market operations as necessary to maintain the federal funds rate in a target range of 2 to 2¼ percent, including overnight reverse repurchase operations (and reverse repos with maturities of more than one day when necessary to accommodate weekend, holiday, or similar      trading conventions) at an offering rate of 2.00 percent, in amounts limited only by the value of Treasury securities held outright in SOMA that are available for such operations and by a per-counterparty limit of $30 billion.

 

 Effective August 1, 2019, the Committee directs the Desk to roll over at auction all principal payments from the Federal Reserve’s holdings of Treasury securities and to reinvest all principal payments from the Federal Reserve’s holdings of agency debt and agency mortgagebacked securities received during each calendar month. Principal payments from agency debt

    and agency mortgage-backed securities up to $20 billion per month will be reinvested in Treasury securities to roughly match the maturity composition of Treasury securities outstanding; principal payments in excess of $20 billion per month will continue to be reinvested in agency mortgage-backed securities. Small deviations from these amounts for operational reasons are acceptable.

    The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Fed’s agency mortgage-backed securities transactions.”

 

The vote also encompassed approval of the statement below to be released at 2:00 p.m.:

 

  “Information received since the Federal Open Market Committee met in June indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although growth of household spending has picked up from earlier in the year, growth of business fixed investment has been soft. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

      Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 2 to 2¼ percent. This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain. As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective. 

 

      In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its  maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

 

      The Committee will conclude the reduction of its aggregate securities holdings in the System Open Market Account in August, two months earlier than previously indicated.”

 

  <Voting for this action> 

   Jerome H. Powell, John C. Williams, Michelle W. Bowman, Lael Brainard, James Bullard, Richard H. Clarida, Charles L. Evans, Randal K. Quarles.

   <Voting against this action>

    Esther L. George and Eric Rosengren.

 

President George dissented because she believed that an unchanged setting of policy was appropriate based on the incoming data and the outlook for economic activity over the medium term. Recognizing risks to the outlook from the crosscurrents emanating from trade policy uncertainty and weaker global activity, President George would be prepared to adjust policy should incoming data point to a materially weaker outlook for the economy.

 

President Rosengren dissented because he did not see a clear and compelling case for additional accommodation at this time given that the unemployment rate stood near 50-year lows, inflation seemed likely to rise toward the Committee’s 2 percent target, and financial stability concerns were elevated, as indicated by near-record equity prices and corporate leverage.

 

Consistent with the Committee’s decision to lower the target range for the federal funds rate to 2 to 2¼ percent, the Board of Governors voted unanimously to lower the interest rate paid on required and excess reserve balances to 2.10 percent and voted unanimously to approve a ¼ percentage point decrease in the primary credit rate to 2.75 percent, effective August 1, 2019.7 

 

[부록.1] 지난 주 T-Bill 수익률 동향

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